Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

GREATER LONDON COUNCIL (MONEY) BILL

Read the Third time, and passed.

COUNTY OF LANCASHIRE BILL [Lords]

Read a Second time, and committed.

LLOYDS BOWMAKER BILL [Lords] (By Order)

Order for Third Reading read.

To be read the Third time upon Thursday.

Oral Answers to Questions — SOCIAL SERVICES

Consultants

Mr. Stan Thorne: asked the Secretary of State for Social Services whether he has revised his plans for an increase in the number of consultants as a result of the Chancellor of the Exchequer's statement on 7 July.

The Minister for Health (Mr. Kenneth Clarke): As my right hon. Friend made clear on 7 July, it will be necessary for health authorities to work to lower manpower targets for 1984, but we remain committed to the policy objective of improving the medical staffing structure, and therefore the quality of medical care, by increasing the ratio of consultants to junior staff.

Mr. Thorne: Is the Minister aware of the considerable strain on consultants operating in hospitals and the tremendous suffering that is caused to certain patients who cannot get access to the treatment and operations that only consultants can provide?

Mr. Clarke: In the four years from 1978 to 1982 the number of consultants has increased by 992, which is an increase of 8·1 per cent. I am not yet aware that as a result of the statement of my right hon. Friend the Chancellor of the Exchequer we have failed to fill a solitary consultant's place. As I said, we are committed to our policies and we shall steadily improve matters.

Mr. Ashley: Will the Minister comment on the distribution of consultants, as well as their numbers, because in the west midlands there is less than one consultant per million people, whereas the Thames region has seven consultants per million people? Does he agree that this crazy maldistribution means that the people in the west midlands are less well cared for, and that this matter requires urgent action by him?

Mr. Clarke: The unfair distribution of resources goes back to the beginning of the National Health Service. However, I agree with the right hon. Gentleman. We continue to redistribute resources—and, therefore, consultant staff—in our allocation of moneys. As a result, we continue to give the west midlands region growth money, and we have told it to continue planning in the expectation of increased resources over the next 10 years.

Mr. Madden: Does the Minister agree that, as a result of the Chancellor of the Exchequer's statement, about 20,000 NHS staff, including doctors and nurses, will be sacked? Will he confirm the report in the The Sunday Times last weekend that if these cuts are implemented they will cut deeply into the provision for the care of the elderly throughout Britain?

Mr. Clarke: That figure is completely exaggerated. There is no question of 20,000 jobs being lost. We are consulting the regional chairmen about the new manpower targets for 1984. We believe that a more efficient use of manpower, which is our main resource, can be achieved without any adverse effect on patient services.

Drugs

Mr. Knox: asked the Secretary of State for Social Services what was the percentage change in the cost of drugs dispensed under the National Health Service in each of the past three years.

Mr. Sean Hughes: asked the Secretary of State for Social Services by how much he expects to reduce the National Health Service drugs bill following the statement by the Chancellor of the Exchequer on 7 July.

Mr. Lofthouse: asked the Secretary of State for Social Services whether he will immediately reduce the rate for Government non-competitive contracts in the pharmaceutical industry to 17 per cent. or less following the recommendation of the Public Accounts Committee in its tenth report of Session 1982–83.

The Secretary of State for Social Services (Mr. Norman Fowler): The cost of NHS drugs dispensed in the three years to 1981–82 increased by approximately 15, 21 and 14 per cent. respectively. Pharmaceutical industry profits from the Health Service are being examined in the current review of the pharmaceutical price regulation scheme. Meanwhile, as one of the measures to contain public expenditure, I have secured the industry's agreement to a reduction of £25 million in the United Kingdom Health Service drugs bill in the current financial year.

Mr. Knox: Is my right hon. Friend satisfied that the cost of drugs is now tightly under control?

Mr. Fowler: We want to do more with the family practioner service to be completely satisfied about that matter. As I explained to my hon. Friend, the pharmaceutical price regulation scheme is now being examined. We are making progress with it, and we expect to have savings from it.

Mr. Hughes: Is not the £25 million which the Secretary of State mentioned less than the total amount of excess profis made by the drug companies since the right hon. Gentleman became Secretary of State?

Mr. Fowler: No, Sir. The £25 million that we are seeking from the drugs industry is a six-months total. It follows from that that the annual total will be £50 million. If other industries had been asked to make such a contribution no one here would be seriously suggesting that it was an unnecessarily small contribution.

Mrs. Currie: I welcome the Secretary of State's determination to obtain value for money from the pharmaceutical industry, but does he nevertheless recognise that the current arrangements for August and September will cause the main brunt to fall on dispensing chemists, that it will take them six to eight weeks to clear high-price stocks and that, meanwhile, they will be paid at the lower prices?

Mr. Fowler: No, it will not cause the main brunt of the economies to fall upon retail chemists, although it will have some impact on them. We shall be considering that with representatives of the pharmacists and I hope that one of my ministerial team will be meeting them in the next few days.

Mr. Willie W. Hamilton: Is the Minister aware that confidential information given to the Select Committee on Public Accounts about the profits of the drug firms showed a disgraceful state of affairs of, in some cases, more than 100 per cent. profit? Will he take much more robust action against that exploitation of the NHS?

Mr. Fowler: There is no question of exploitation of the NHS. It comes ill from a Labour Member to make such foolish generalisations about an industry which employs about 67,000 people in Britain and makes a contribution to the balance of payments of £600 million.

Mr. Pavitt: Will the right hon. Gentleman revise the voluntary price regulation scheme, as the Select Committee has shown it to be a complete shambles? Will he now implement the Greenfield report on generic prescribing? If not, when a company has been holding the Health Service to ransom on a patented drug, will he use his powers under the patent legislation to make a purchase for the Crown?

Mr. Fowler: The pharmaceutical price regulation scheme and the scheme that is now in operation between the Government and the industry were agreed by the Labour Government in 1978. The Government are reviewing that scheme and we shall be reviewing the return on capital, the Greenfield report and promotional expenses. It is this Government who have taken action.

Family Practitioner Services (Costs)

Dr. Marek: asked the Secretary of State for Social Services whether gross spending on family practitioner services has risen more rapidly than on hospital and community services in the last four years.

Mr. Fowler: Between 1978–79 and 1982–83 spending on the family practitioner services rose by some 7 per cent. more in cash than spending on the hospital and community health services.

Dr. Marek: Does the Minister have any plans to institiute cash limits on family practitioner committees? If so, by what mechanism will he instigate that? Will the Minister give a categoric assurance that in that event doctors will not be prevented from giving the best possible prescription to patients?

Mr. Fowler: We shall always want to bear the hon. Gentleman's second point in mind. Question No. 6 deals with cash limits, and I must ask the hon. Gentleman to await my reply to that.

Voluntary Organisations

Mr. Rowe: asked the Secretary of State for Social Services how much support his Department gives to help voluntary organisations.

The Under-Secretary of State for Health and Social Security (Mr. Tony Newton): In 1982–83 the Department gave grants totalling over £15 million to voluntary organisations through 10 different schemes. I am circulating details in the Official Report.
Mr. Rowe: Does my hon. Friend agree that one of the major values of the voluntary sector is to act as a critic of the monopoly public sector? Will he assure the House that in the allocation of grants critical voluntary organisations do not suffer?

Mr. Newton: I can give my hon. Friend the assurance that he seeks. We welcome constructive criticism as one of the great merits of the voluntary sector in a democratic society, even if it is sometimes uncomfortable for Ministers, of whatever party.

Mr. Alfred Morris: Is the Minister aware that because of the Government's doubling of VAT last year the Spastics Society paid £428,000 in non-recoverable VAT? Is he further aware that, between them, six national charities for the disabled paid over £1 million in VAT? Why do the Government mug the good samaritans in that way? Will the Minister now stand up for the charities and tell the Chancellor to take his hand out of their tills?

Mr. Newton: The right hon. Gentleman knows very well that those matters have been the subject of extensive consultation and discussion with my right hon. Friend the Chancellor of the Exchequer. I think that he also knows some of the difficulties. He is well aware that the Government, including my right hon. Friend the Chancellor, have taken many steps to assist charities in the past few years.

Following are the details:


Grants to Voluntary Bodies under S64 of the Health Services and Public Health Act 1968—General Scheme (Subhead K2(1))


£


Action for Dysphasic Adults
7,500


Action on Smoking and Health
115,000


Advocacy Alliance
10,000


Age Concern
228,000


Alcohol Education Centre
68,000


Alcoholic Hostels
166,331


Alcoholic Recovery Project
61,750


Alcoholism Community Centres for Education Prevention and Treatment
35,400


Alzheimer's Disease Society
23,000


Anthony Nolan Fund
6,000


Apex Trust
7,000


Association Aide a Toute Detresse
5,200


Association for all Speech Impaired Children
8,000


Association for Independent Disabled Self Sufficiency
1,000


Association for Spina Bifida and Hydrocephalus
32,500


Association of Breast feeding Mothers
1,850


Association of Carers
8,000


Association of Residential Communities
12,000


Association of Professions for the Mentally Handicapped
6,000


Asthma Society
2,000

Grants to Voluntary Bodies under S64 of the Health Services and Public Health Act 1968—General Scheme (Subhead K2(1))


£


Baby Life Support Systems
532


Back Pain Association
12,750


Bexley Moorings
10,500


Birmingham Settlement
9,000


Blenheim Street Agency
7,600


Breakthrough Trust
29,500


British Agencies for Adoption and Fostering
243,000


British Association for Service to the Elderly
2,000


British Association of the Hard of Hearing
17,333


British Association of Immediate Care
25,000


British Deaf Association
21,000


British Diabetic Association
1,500


British Epilepsy Association
22,000


British Institute of Mental Handicap
24,500


British Red Cross
4,570


British Retinitis Pigmentosa Society
5,000


Broadcasting Support Services
3,000


Brook Advisory Centres
22,500


Calibre
8,000


Campaign for Single Homeless People
24,000


Campaign for the Mentally Handicapped
14,000


Care
15,000


Catholic Marriage Advisory Council
23,000


Centre for Ethnic Minorities Health Studies
5,825


Centre for Policy on Ageing
90,296


Centre on Environment for the Handicapped
28,500


Chest Heart and Stroke Association
5,000


Child Accident Prevention Trust
42,585


Child Poverty Action Group
15,000


Children's Legal Centre
9,500


Church of England Children's Society
116,000


City Roads Crisis Intervention
92,804


Clock Tower Association
4,750


Coeliac Society
7,500


Combat Huntington's Chorea
15,000


Community Drugs Project
5,300


Community Service Volunteers
36,250


Contact
20,000


Contact a Family
10,000


Cope
85,300


Coronary Prevention Group
3,000


Council for the Advancement of Communication. with Deaf People
10,000


Cranstoun Hostel
3,770


Crossroads Care Attendant Schemes Ltd.
58,000


Cruse
80,000


Cyrenians
54,750


Dial UK
12,500


Disabled Drivers Association
4,000


Disabled Drivers Motor Club
3,500


Disabled Living Foundation
210,039


Disablement Income Group
20,800


Dorney Parish Eton College Project
14,000


Downs Children's Association
6,000


Dr. Barnardo's
147,673


Elizabeth Fitzroy Trust
15,000


Elizabeth House Association
10,500


Employment Fellowship
21,000


Extend
10,000


Family Forum
16,915


Family Holiday Association
2,500


Family Planning Association
99,600


Family Rights Group
17,250


Family Service Units
168,000


Family Tree
8,900


Family Welfare Association
104,930


Federation of Alcoholic Rehabilitation Establishments
79,580


Fire Precautions (in voluntary residential homes)
134,389


Fluoridation Society
15,000

Grants to Voluntary Bodies under S64 of the Health Services and Public Health Act 196—General Scheme (Subhead K2(1))


£


Gingerbread
48,000


Hampshire Association for the Care and Resettlement



of Offenders
20,000


Hampshire Council on Alcoholism
3,000


Handcrafts Advisory Association for the Disabled
8,800


Handicapped Adventure Playground Association
1,625


Headway Association
5,000


Helen Ley Charitable Trust
5,000


Hertfordshire Standing Conference on Drug Abuse
1.700


Holiday Care Service
5.000


Home Base
7,500


Home Farm Trust
15,000


Home Start Consultancy
19,000


Hungerford Day Centre for Drug Addicts
12,700


Independent Adoption Society
4,000


Institute for the Study of Drug Dependence
143,000


International Hospital Federation
30,000


International Social Service
30,000


International Voluntary Service
18,000


Invalid Children's Aid Association
20,000


Invalids At Home Trust
2,400


Jewish Blind Society
20,000


Joint Committee on Mobility for the Disabled
1,300


Kent Council on Alcoholism
1,100


L'Arche Ltd.
20,000


La Leche League of Great Britain
1,750


Leicester Council for Voluntary Service
15,450


Leonard Cheshire Foundation
12,000


Liverpool Alcoholism Services
26,609


London Voluntary Service Council
12,000


Mastectomy Association
6,000


Maternity Alliance
23,200


Medical Commission on Accident Prevention
13,600


Medical Council on Alcoholism
70,300


Mencap
230,750


Mental After Care Association
45,000


Mental Health Film Council
4,000


Migraine Trust
5,000


National Ankylosing Spondylitis Society
3,000


National Association for the Care and Resettlement of Offenders
169,000


National Association for the Childless
13,000


National Association for the Deaf/Blind, Rubella Handicapped
27,000


National Association for Maternal and Child Welfare
5,000


National Association for Mental Health
325,000


National Association for Patient Participation in General Practice
1,000


National Association for the Welfare of Children in Hospital
50,000


National Association of Leagues of Hospital Friends
10,000


National Association of Victims Support Schemes
8,150


National Association of Voluntary Hostels
4,500


National Association of Youth Clubs
21,900


National Childbirth Trust
15,000


National Childminding Association
38,500


National Children's Bureau
135,208


National Children's Home
1,875


National Council for One Parent Families
117,500


National Council for Carers and their Elderly Dependents
200


National Council of Voluntary Child Care Organisations
31,285


National Council for Voluntary Organisations
20,000


National Council on Alcoholism
241,1300


National Eczema Society
7,500


National Elfrida Rathbone Society
12,000


National Federation of Kidney Patients
3,(XX)


National Federation of the Blind of the United Kingdom
4,000

Grants to Voluntary Bodies under S64 of the Health Services and Public Health Act 1968—General Scheme (Subhead K2(1))


£


National Foster Care Association
69,453


National Library for the Blind
10,000


National Listening Library
15,000


National Marriage Guidance Council
20,000


National Out of School Alliance
27,000


National Playbus Association
19,625


National Schizophrenia Fellowship
71,000


National Society for the Prevention of Cruelty of Children
193,000


National Tape Magazine for the Blind
500


National Youth Bureau
56,800


Norfolk Childrens Projects
40,000


Northern Regional Association for the Blind
50,015


Nottingham Council for Voluntary Services
23,800


Opus
5,500


Outset
9,000


Organisation for Sickle Cell Research
8,000


Overseas Doctors Association
7,000


Parent to Parent Information on Adoption Services
4,500


Parents for Children
46,000


Partially Sighted Society
11,000


Physically Handicapped and Able Bodied
22,500


Plymouth Night Shelter
17,770


Possum Users Association
7,750


Pre-School Playgroups Association
350,000


Rainer Foundation
57,375


Rape Counselling and Research Project
20,000


Richmond Fellowship
95,000


Rother Help Centre
12,500


Royal Association for Disability and Rehabilitation
230,000


Royal National Institute for the Blind
235,000


Royal National Institute for the Deaf
53,500


Royal School for the Blind
14,000


Salford/Greater Manchester Council on Alcoholism
4,000


Samaritans
100,000


Save the Children Fund
164,900


Sexual and Personal Relationships of the Disabled
31,200


Shape
10,000


Sheffield Family Service Units
8,750


Sickle Cell Society
8,000


Social Work Training Grants
98,542


Society of St. Dismas
4,480


Society of Voluntary Associates
9,750


Southern and Western Regional Association for the Blind
62,624


Spastics Society
86,000


Spinal Injuries Association
15,000


Standing Conference on Drug Abuse
60,000


St. Albans Diocesan Council for Social Responsibility
17,575


St. Katharine Housing Trust
3,000


St. John Ambulance
44,500


Study Centre on the Family
23,000


Stonham Housing Association
17,100


Sue Ryder Foundation
8,000


Talking Newspapers Association of the United Kingdom
750


The Patients Association
5,000


Toy Libraries Association
62,000


Turning Point
95,800


Venture 12 Project
20,000


Voluntary Council for Handicapped Children
30,000


Voluntary Organisations Liaison Committee for Under Fives
5,000


Volunteer Centre
51,270


Wessex Rehabilitation Association
20,000


Westminister Pastoral Foundation
60,000


Widows Advisory Trust
10,000


Winged Fellowship Trust
12,000


Womens Aid Federation (England)
100,000


Womens Health Concern
3,250


Womens National Cancer Control Campaign
81,200

Grants to Voluntary Bodies under S64 of the Health S Public Health Act 1968—General Scheme (Subhead K2(1))


£


World Assembly on Ageing Awards
5,500


£ for £ Scheme
45,650



8,963,232

Grants paid to registered voluntary children's homes (subhead H1(1)(a))


£


Adullam House Trust
2,100


Fellowship of St. Nicholas
1,600


Turner's Court
60,000



63,700


Grants paid to assisted community homes (subhead H1(1)(b))


Birmingham Diocesan Rescue Society
1,965


Catholic Child Welfare Society
201,816


Catholic Children's Rescue Society
39,725


Dr. Barnardo's
33,000



276,506


Grants for social work training (subhead H5)


National Institute for Social Work
203,000


National Children's Home
32,650


VORTEX
9,129


FPA
—


Volunteer Centre
2,500


Total
247,279

Grants to voluntary organisations under Schedule 5 of the Supplementary Benefits Act 1976 (as amended) (Subhead B(3)552)


A. GENERAL SCHEME GRANTS



Voluntary Organisation
1982–83



£


1. Aberdeen Cyrenians
4,100


2. Birmingham Committee for Night Shelter
6,400


3. Birmingham, St. Anne's
5,300


4. Birmingham, St. Basil's
6,300


5. Brighton, YMCA
4,600


6. Cambridge Cyrenians
1,200


7. Cardiff Cyrenians
3,500


8. Coventry Cyrenians
4,600


9. Edinburgh, People's Palace
5,800


10. Exeter Shilhay
4,600


11. Glasgow, Kirkhaven
3,000


12. Guildford Cyrenians
2,300


13. Leeds Cyrenians
1,200


14. Liverpool Metropolitan Cathedral Crypt
3,500


15. London, Bondway
12,700


16. London, Centrepoint
8,100


17. London, Theatre Girls' Club
8,100


18. Lowestoft Night Shelter
3,500


19. Manchester Night Shelter
8,100


20. Norwich Night Shelter
5,800


21. Nottingham, Help the Homeless
3,800


22. Oxford Cyrenians
6,900


23. Plymouth Night Shelter
3,500


24. Portsmouth, Harbour Community
1,600


25. Portsmouth, St. Petroc's Community Trust
4,100


26. Preston, Homeless in
3,500


27. Sheffield, Joint Standing Committee
5,800


28. Stockton Churches Mission to the Single Homeless
4,600


29. Stoke Potteries Housing Association
4,100


30. Swansea, SASH
4,100


31. Swindon Cyrenians
3,000


32. Taunton Association for the Homeless
4,600


33. Tyneside Cyrenians
4,600


34. Wolverhampton Overnight Shelter Group
5,000


35. Worcester, St. Paul's
3,500

B. Camberwell Replacement Scheme—Topping-up (Revenue) Grants

(i) Projects approved in 1981–82*

Project
Revenue



£


North Lambeth Day Centre, 2 Walcorde Avenue, SE17
5,431


Single Homeless Project, 18 Palmerston Road, E17
2,551


Bondway Shelter, 39 Knatchbull Road, SE5
9,748


Bondway Shelter, 50 Balham Park Road, SW12
10,008


Circle Trust Club, 36 Chadwick Road, SE15
6,023


Circle Trust Club, 314 Coldharbour Lane, SW9
7,034


Single Homeless Project, 43–44 The Park, W5
8,644


Single Homeless Project, 93–95 Kings Cross Read, WC1
15,803


TOTAL REVENUE
65,242

(ii) Projects approved in 1982–83*

Project
Revenue



£


Circle Trust, 68 Elliott Row, SE11
5,430


Single Homeless Project, 321–323 Katherine Road, E7
7,468


Patchwork Community, 7–8 Micawber Street, N1
1,945


Peter Bedford Trust, 43 Tollington Road, N7
5,932


Peter Bedford Trust, 114 Forest Road, E5
1,225


St. Mungo's Community HA, 25 Claremont Road, W9
3,006


St. Mungo's, 64–66 Argyle Street, WC1
15,047


Single Homeless Project, 47 Knox Road, E7
5,031


North Lambeth Day Centre, 31 Helix Road, SW2
4,782


North Lambeth Day Centre, 11 Paulet Road, SE5
5,579


Single Homeless Project, 7 Lucien Road, SW17
4,906


Single Homeless Project, 124 Beechcroft Road, SW17
4,906


St. Giles Centre, 21 Northlands Street, SE5
5,393


Carr-Gomm Society, 166 East Hill, SE18
706


TOTAL REVENUE
71,356


* These anual grants are payable from the opening date of the project. Most projects will not open until later in 1983–84. Amount of grant actually paid in 1982–83 £3,514 (in respect of Circle Trust Club, 36 Chadwick Road).

Revenue



£


Grant to the Kings Fund Centre year ending 31 December 1982 (subhead K2(2))
287,000


Intermediate treatment Fund: grant in aid (subhead K5)
297,000

Opportunities for volunteering scheme (Subhead K9)



£


Age Concern
450,100


British Association of Settlements and Social Action Centres
145,100


British Council of Churches
215,800


Church of England Children's Society
52,800


Community Service Volunteers
74,300


Consortium on Opportunities for Volunteering General Fund
896,800


Dr. Barnardo's
55,000


Mencap
70,700


National Association for Mental Health
107,520


National Association for the Care and Resettlement of Offenders
134,950


National Association of Leagues of Hospital Friends
38,450


Pre-School Playgroups Association
52,000


Royal Association for Disability and Rehabilitation
161,700


Royal National Institute for the Blind
56,300


Spastics Society
27,500


The Panel of Four
53,500


Volunteer Centre
7,479



2,599,999

The Department also provided £3,818,000 for the year ending 31 December 1982 to help families with very severely disabled children (subhead K3). This is disbursed through the Family Fund, which is administered by the Joseph Rowntree Memorial Trust.

St. Giles Hospital, Camberwell

Ms. Harman: asked the Secretary of State for Social Services if he will pay an official visit to St. Giles hospital, Camberwell.

The Under-Secretary of State for Health and Social Security (Mr. John Patten): I have no plans to do so, but my noble Friend the Under-Secretary of State this morning met a deputation which included the hon. Lady to discuss Camberwell health authority's proposal to transfer inpatient services from St. Giles to St. Francis and Dulwich hospitals.

Ms. Harman: In view of the threatened closure of services at St. Giles hospital, with the loss to the area of not only vital services but hundreds of jobs, will the Minister accept that the Government's pledge that the Health Service is safe in their hands has a somewhat hollow ring to it? Will he also recognise that people in Peckham feel that the Government are prepared to sacrifice their health in pursuit of the Government's cruel spending cuts?

Mr. Patten: My answer to the two general points is, no, followed by no. In answer to the specific question on the hospital about which the hon. Lady is rightly concerned and which is a popular local hospital in an area of social deprivation, I cart say that that matter is being considered by my right hon. Friend the Secretary of State. However, the majority of the people from the area go not to that hospital but to others nearby, such as King's college hospital.

Mr. Skinner: Is the Minister aware that the people of Morton in my constituency would join forces with those in Camberwell in complaining about the closure of their hospital? Will the hon. Gentleman give an assurance that now that he has stopped the pharmaceutical industry ripping off the taxpayer and the NHS to the extent that it was doing hitherto, the money will be used to keep open the St. Giles and Morton hospitals?

Mr. Patten: The hon. Gentleman is uncharacteristically out of touch with his constituency. I understand that the area's community health council has agreed to the closure.

Family Practitioner Services

Mr. Bell: asked the Secretary of State for Social Services whether, in the light of the Chancellor of the Exchequer's statement on 7 July, he has any plans to introduce cash limits on family practitioner services.

Mr. Fowler: The Government have commissioned an independent study by a firm of chartered accountants, Binder Hamlyn, of arrangements for forecasting and controlling expenditure on the family practitioner services. Its remit includes examination of the possibility of introducing a cash limit. We are awaiting its report. Meanwhile no decision has been or will be taken.

Mr. Bell: Will the Secretary of State tell the House whether the report will take into account the possibility of


end-year flexible limits in the family practitioner services? If so, does he agree that that could cause the closure of small surgeries throughout the country?

Mr. Fowler: The Binder Hamlyn study has a wide remit, but I do not think that end-year flexibility will be one of the things at which it will be looking.

Dr. Mawhinney: Does my right hon. Friend accept that if the report does not recommend cash limits for the family practitioner services there will be a need to find some other way to improve the services' cost effectiveness?

Mr. Fowler: Yes. It is important that, given the expense of the family practitioner services, we seek, as we have sought with the hospital services, to make the most effective use of resources.

Mr. Terry Davis: Given that the family doctor deals with people who need immediate treatment, will the Secretary of State tell the House what sorts of economies could be made by a family practitioner committee faced with a need to cut spending to keep within its cash limits?

Mr. Fowler: The hon. Gentleman is presupposing that cash limits will be introduced. As I have just made clear, that has not been and will not be decided until we have the Binder Hamlyn report.

Voluntary Organisations

Mr. Key: asked the Secretary of State for Social Services how he proposes to develop his strategy of improving co-operation between voluntary organisations and statutory services.

Mr. Newton: Recent legislation guarantees a place for voluntary organisations in joint planning by health and local authorities, where they will play a vital role in particular in our "Care in the Community" proposals. We shall continue to look for new ways to promote this partnership in which voluntary effort complements but does not replace statutory services.

Mr. Key: Does my hon. Friend agree that the voluntary sector is particularly good at raising capital funds but that there is much more of a problem with revenue transfers? Therefore, in line with his paper "Care in the Community", will he consider the problem of long-term revenue funding of capital projects such as the Salisbury hospice care trust?

Mr. Newton: Without commenting on the specific case mentioned by my hon. Friend, which I will gladly look into if he wishes, I should make the point that additional proposals for joint finance, including those in the last Parliament's Health and Social Services and Social Security Adjudications Act 1983, do provide for some improvements in the terms of joint finance and, as I said in my earlier answer, are very much aimed in part at voluntary organisations.

Mr. Home Robertson: Does the Minister recall the long caller office correspondence that I have been having with him ever since his Department suddenly curtailed the caller office services in the towns of Tranent and Haddington in my constituency? He knows that that has cast a considerably increased burden on to local voluntary organisations such as the citizens advice bureaux. Has he yet thought of a way of paying back the citizens advice bureaux for doing his Department's work?

Mr. Newton: I think that I have made the point to the hon. Gentleman in correspondence that while the Government provide some central funding, not through my Department but through another, to the National Association of Citizens Advice Bureaux, the funding of local citizens advice bureaux is a matter for local authorities.

Mr. Sims: Is my hon. Friend aware that if a housing association wishes to provide accommodation for elderly people with wardens on site it can do so with grants from the housing corporation? However, if it wishes to buy accommodation where frail, sick and elderly people may live and have medical attention, it does not qualify for housing corporation grants, and no similar grant is available from his Department. Could not this be considered as an area for more co-operation between the voluntary and the statutory sectors?

Mr. Newton: I should like to look into the particular point, but I refer again to the Act that I mentioned a moment ago. One of its purposes is to extend the scope for the use of joint finance in connection with housing in relation to care in the community.

Mr. Meadowcroft: Will the Minister concentrate on the problem that arises as between short-term and long-term aid for the voluntary sector? Does he accept that there are immense problems for the voluntary sector in coping with capital assets unless it has a guarantee of funding? Does the Minister accept that there is room for more long-term funding than the Government currently acknowledge?

Mr. Newton: Those problems are not confined to the voluntary sector. They are also raised with us by local authorities' social services departments. We are taking steps to try to improve the position and obviously we will consider further suggestions if and when they are made.

Mr. Alfred Morris: On this important question of cooperation between the voluntary and statutory sectors, the Minister will have seen the code of practice which the Royal Association for Disability and Rehabilitation is recommending to local authorities in respect of the services they provide under the Chronically Sick and Disabled Persons Act. What is the Government's reaction to that important document?

Mr. Newton: I was interested to see the document. Indeed, I have written to RADAR to say that I have no doubt that local authorities will wish to consider it in considering how they, the local authorities, excercise their statutory responsibilities.

Occupational Pension Schemes

Mr. Nelson: asked the Secretary of State for Social Services if he will take steps to promote the interests of members of occupational pension schemes.

The Minister for Social Security (Dr. Rhodes Boyson): I shall do whatever I reasonably can to promote the interests of members of occupational pension schemes.

Mr. Nelson: Has my hon. Friend seen the latest attempts of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) to re-establish his Left-wing credentials by proposing that pension funds, the savings of millions of people, should be diverted into the Labour


party's state investment plans? Does my hon. Friend agree that if such a proposition were ever to be presented to the British electorate the Labour party would get exactly the same verdict as it did at the general election?

Dr. Boyson: I entirely agree with my hon. Friend. Indeed, at the general election that prospectus was put before the British public. The idea that 10 per cent. of pension funds affecting 11·5 million people should go into a national investment bank to be used by the Government was one of the reasons why the Labour party lost the general election. My right hon. Friend the Secretary of State referred to it in a speech at that time.

Mr. Ward: What progress is being made to ensure that occupational pension schemes do not prevent mobility of labour?

Dr. Boyson: I am grateful to my hon. Friend for raising that point. The issue of early leavers is an important matter. We have called a conference for 14 September with all the interested parties to see whether we can progress on this matter with voluntary action. If that is not possible, however, we shall have to take other action.

Mr. Andrew F. Bennett: Does the Minister agree that one of the essential aspects of an occupational pension scheme is that people can make contributions throughout their working lives? Is it not a crazy system for British pension money to be invested abroad to make products which in turn put people out of work in this country, so making it impossible for them to complete their pension contributions?

Dr. Boyson: I think that the first responsibility of those who are managing pension funds is to maximise the income so that contributors can get a good pension when they retire. I am sure that the public, including the hon. Gentleman's constituents, who are involved in pension funds, would agree with that. The hon. Gentleman referred to people contributing throughout their working lives. We are concerned that pension funds are responsive to those who put their money in. We are considering the responsiveness of the schemes to their clients.

Mr. John: The Minister should know that this has been a problem for many years. Is he aware that the CBI has calculated that more than 90 per cent. of people change their jobs during their lifetime? Does he agree with the CBI's view that a system which subsidises the few by penalising the many cannot last? How many more conferences do the Government intend to hold before that truth is realised and rammed home?

Dr. Boyson: I do not remember the Labour party doing anything about this matter when it was in Government. We have had a report from the Occupational Pensions Board. We have similarly called a conference and, as my right hon. Friend said last year, we would prefer early leavers to be dealt with voluntarily, but if not we will take legislative action. That is something that the Labour party never even talked about.

Nurses

Mr. Gareth Wardell: asked the Secretary of State for Social Services whether he expects the number of whole-time equivalent nurses to fall during the present financial year.

Mr. Ron Davies: asked the Secretary of State for Social Services how many agency nurses are employed in the National Health Service.

Mr. Kenneth Clarke: We have told regional health authority chairmen that the NHS should plan to work to lower manpower targets over the year 1983–84, but within those targets we expect to see a shift in the balance of those employed towards those staff engaged in direct patient care, such as nurses.
Provisional figures for September 1982 show that there are about 3,000— in whole-time equivalent terms—agency nurses and midwives working in the National Health Service in England.

Mr. Wardell: Will the Minister answer yes or no if he is planning to reduce the number of nurses by 2,000 this year?

Mr. Clarke: The hon. Gentleman has no basis or assumption for that figure.

Mr. James Lamond: The answer is no, then, is it?

Mr. Clarke: We are urging health authorities to work to lower manpower targets which will ensure the more efficient use of manpower of all the staff, including nurses. If we make more efficient use of manpower, we can improve the quality of nursing care.

Mr. Davies: Is the Minister aware of the increasing concern within the National Health Service about the employment of agency nurses? Is not the increasing employment of agency nurses jeopardising the long-term employment of nurses within the Health Service. Will the Minister now say whether he has any proposals to limit the number of agency nurses within the National Health Service?

Mr. Clarke: We have no evidence that an increase in the number of agency nurses employed in the National Health Service is taking place. We can see nothing wrong with employing agency nurses in suitable circumstances to cover emergency or particular situations. It is for each individual health authority to make the best decisions about the type of nursing manpower it needs and the numbers it needs in order to maximise patient care within its available resources.

Mr. Haynes: Is the Minister aware that the nursing school in the central Nottinghamshire health district has had its trainee nurse intake seriously reduced? The Minister knows that the central Nottinghamshire health district sits on his constituency's doorstep. This will mean that fewer nurses will go into the service, with the end result that services will suffer. Is he aware that this is all because of the Government's policy? The Secretary of State must not shake his head. What I have said is true. There has been a serious reduction in Trent region's allocation. I want a straight answer from the Minister.

Mr. Clarke: Without notice, I cannot answer for the decisions of nursing management in central Nottinghamshire, even though it is quite close to my constituency. The proper approach to nurse training is to train the number of nurses in the right place and in the right specialties that good patient care requires. That is the judgment which, I am sure, the managers in central Nottinghamshire are applying, just as we are applying it nationally.

Mr. Terry Davis: May we have an assurance that there will not be any reduction this year in the number of nurses?

Mr. Clarke: What on earth would be the point of giving an undertaking like that if we can save money by making better use of nurse manpower in one place to release resources for the better care of patients in another? It is absolutely fatuous to approach the planning of an important service such as the NHS by just wedding oneself to job statistics in a particular place at a particular time. We need to get the best value for money we can so as to get the best possible patient care from the resources available.

Maternity Services Advisory Committee

Mr. Yeo: asked the Secretary of State for Social Services when he expects the maternity services advisory committee to publish its next report.

Mr. John Patten: I understand that the committee hopes that its next report, on care during childbirth, will be ready for publication later this year.

Mr. Yeo: While we await the publication of the next report, will my hon. Friend tell the House what response his Department has received to the last report of the maternity services advisory committee and what steps his Department is taking to monitor the implementation of that report's recommendations by individual health authorities, particularly in the light of the successful Sighthill scheme for ante-natal care in Edinburgh?

Mr. Patten: About 11,000 copies of this excellent report have been distributed to health authorities, professionals and others in the field. The Department is monitoring carefully the activities of the authorities and the way in which they respond to the checklist of recomendations set out in the report. I know that my hon. Friend joins me in rejoicing in the fact that perinatal mortality has fallen by more than a quarter in this country in the past five years.

Hospital and Ward Closures (Yorkshire Region)

Mr. Fatchett: asked the Secretary of State for Social Services how many hospital and ward closures he expects in the Yorkshire region over the next three years.

Mr. Kenneth Clarke: The development of the National Health Service has always involved the closure of old, surplus or unsuitable hospitals and wards from time to time, but I would not normally expect to be directly involved in these issues unless a community health council objected to a district health authority's proposals. I have no such objections from Yorkshire before me at present.

Mr. Fatchett: Is the Minister aware that there is widespread anxiety in Yorkshire because in all the regions covered by the Yorkshire regional health authority there are rumours of closures? Will he say whether the statement made the Chancellor on 7 July will lead to further cuts, the closure of wards and hospitals and the loss of jobs in the NHS in the Yorkshire region?

Mr. Clarke: Her Royal Highness the Princess of Wales is today opening the new district general hospital in Grimbsy. The opening of that new hospital will lead to the closure of the old general hospital and the Croft Baker maternity home. I can therefore confirm that the rumours

about the closure of those hospitals are well-founded, but I cannot accept that as evidence of a cut in the NHS. If we are to develop the service, we must close old, surplus and redundant hospitals and alter the pattern of service to face patient needs. That process must go on.

Mr. Madden: Will the Minister make it clear that if the Yorkshire health authority this week postpones a decision about the future of the Thornton View hospital in Bradford, it will incur no criticism from him?

Mr. Clarke: I understand that it is at present consulting on the future of both those hospitals and I am waiting for the health authority's decisions in the light of that consultation. That is the right way of proceeding in these matters. If a health authority thinks that it can provide services better by making a closure, it must check the views of the local people, and if there is disagreement between the health authority and the community health council, it will eventually come to Ministers for approval.

General Practioners (Costs)

Mr. Lennox-Boyd: asked the Secretary of State for Social Services if he will take steps to change the rule whereby a general practitioner cannot obtain reimbursement for the costs of employing his wife on his ancillary staff.

Mr. John Patten: No, Sir. Some general practitioners already receive an allowance under the related ancillary staff scheme to help with the cost of employing dependant relatives.

Mr. Lennox-Boyd: Does my hon. Friend agree that there is still an anomaly here, for example when a GP seeks to employ his wife for clerical work? Does he agree that it would be possible at least to relieve that anomaly without creating sources of possible abuse?

Mr. Patten: I am glad that my hon. Friend recognises the problem of abuse and that it must be carefully watched. I understand that representatives of the profession will engage in further discussions with my Department on the issue in the near future.

National Health Service (Resources)

Mr. Chapman: asked the Secretary of State for Social Services if he will seek to ensure that a higher proportion of Health Service resources goes to direct patient care by achieving savings in the cost of support services.

Mr. Fowler: Yes, Sir. This is one of the aims of the Government's policy of competitive tendering.

Mr. Chapman: While recognising that expenditure on the NHS has increased by 17 per cent. in real terms in the past five years, but accepting that demand for resources will be even greater in the future, may I ask my right hon. Friend whether he agrees that if we are to give the maximum support to direct patient care it is essential that we eliminate unnecessary bureaucracy and administration in the service, just as it is important to see that within quality specifications we get the best possible price for the services supporting that direct patient care?

Mr. Fowler: I agree with both those points. As has been made clear, the Government are working to manpower targets, but equally what we shall want to do


is to see competitive tendering bringing the support services of the NHS under scrutiny so that we can check the cost of those services, and so that any money saved can go to direct patient care.

Mr. Meadowcroft: Does the Secretary of State accept that there is great danger in the definition of support services as being simply administrative, when it is possible that the support services include the home help services, which are possibly the most economically efficient and valuable of the whole Health Service?

Mr. Fowler: We are talking basically about the NHS, and the services involved in contracting out, which are the domestic services, portering, cleaning and services of that kind. I am sure the hon. Gentleman will agree that if savings can be made in those services and if the money saved can go to direct patient care, his party would support that.

Mr. John Townend: Does my right hon. Friend agree that there is a valid argument for saying that a proportion of any savings made from the privatisation of the support services should be returned to the Treasury to help fund tax reductions for the low-paid?

Mr. Fowler: There is an argument for that, but I am not sure that it is an argument that I would necessarily accept at this stage, because the important thing that we are trying to do is to ensure that the health authorities make sensible economies and savings in their budgets. That money can then go to patient care. That is the sensible way of tackling the problem.

Regional Health Authorities

Mr. Hoyle: asked the Secretary of State for Social Services how many regional health authorities will have net growth in their revenue budgets following the implementation of the proposal announced by the Chancellor of the Exchequer on 7 July.

Mr. Kenneth Clarke: Ten, Sir. In the other four regions the impact of the reductions in finance should be offset by more efficient use of existing resources, particularly manpower.

Mr. Hoyle: But is not the real truth that there will be a cut in every region? How does the hon. and learned Gentleman square that with the statement of the Prime Minister that the NHS was safe with her, when further cuts are intended, and when she said that there would be an increase in spending of £700 million this year, £800 million next year and £700 million the year after? Is not this deception of the electorate a resigning matter?

Mr. Clarke: The real truth, as I have said, is that there will not be cuts in 10 out of the 14 regions. The real truth also is that the overall resources devoted to the NHS will be as planned; in the case of the hospital services, about the same as last year. The four regions that are suffering some reduction in finance are comparatively over-resourced regions and we must work towards a fair distribution of those resources, not least for the benefit of an under-resourced district health authority such as Warrington, whose cause the hon. Gentleman is usually urging on me.

Mr. Dubs: Is not the real truth that the four regional health authorities covering the London area will be under

enormous pressure, with serious consequences for the district health authorities in inner London? How many hospitals does the Minister think will be closed as a result of these proposals?

Mr. Clarke: The four Thames regions have more than their fair share of resources. That is not a fact suddenly discovered by this Government; it was discovered by previous Governments. We therefore have to reallocate resources to give a fairer distribution to the rest of the country. In London there is a surplus of acute beds but a shortage of some other services, particularly community services. Therefore we must reallocate within the Thames regions as well. That process will lead only to the closure of surplus, redundant or unnecessary beds to release resources for other patient care.

Mr. Robert C. Brown: Is the Minister aware that it is not long since he was talking about the reallocation of finance to areas such as Newcastle-upon-Tyne because of the enormous problems of that area, yet here we have a £1 million cut being imposed by him so soon after the election?

Mr. Clarke: We are talking about redistribution in favour of the northern region, and we still are; that continues to be the policy of the Government.

National Health Service (Resources)

Mr. Gould: asked the Secretary of State for Social Services in which areas of National Health Service expenditure he anticipates further reductions in the level of resources available.

Mr. Kenneth Clarke: Total net expenditure on the NHS for 1983–84 will scarcely be affected by the Chancellor's statement of 7 July. There will be increases in expenditure on the family practitioner services; reductions in the cost of the NHS drugs bill; and revised, lower cash limits for the hospital and community health services and centrally financed services. No further changes are planned.

Mr. Gould: In view of the demands of the Chancellor of the Exchequer for a further £5 billion worth of cuts, may I ask how the Secretary of State will take action to make good his party's election promise that the National Health Service is safe with a Conservative Government?

Mr. Clarke: The hon. Gentleman knows that we cannot anticipate the Government's discussions on public expenditure for future years, which will take place in the usual way later this year. I reiterate the promise that the National Health Service is safe with us. That is the promise that we gave when faced with ridiculous allegations by Labour candidates that we were seeking to abolish it.

Mr. Forman: As the Health Service is likely always to need extra funds for the foreseeable future because of the growth in demand for its services, and as it is likely to be under continuing pressure from the Treasury, why does the Department of Health and Social Security not seek to implement the James report on health and diet, which it is estimated might lead to savings in the health bill of up to £1,000 million, which could then be allocated to other priority tasks within the Health Service?

Mr. Clarke: There will always be growing demands on the Health Service. They will be met in part by new


funds which it will be within the country's ability to provide, and by improved efficiency and better value for money within the resources that we have available. The James report is a controversial document, which is not yet approved by the main committee, which commissioned it and which has not yet reached the Government. There is wide controversy over all issues of diet but we shall look with interest at any recommendations which achieve wide acceptance and might lead to better health standards being achieved by the population and lower demands on health care.

Mr. Norman Atkinson: Is it not the case that when the Minister answers a question that appears late on the Order Paper he will announce the closure of over 50 hospitals in the four London regions? Does he accept that the announcement will be made at a time when hospital waiting lists are lengthening? Why is he so proud of the policy of shifting resources from inner London to outer London, where it is far easier to get an acute bed than in inner London, as waiting times are shorter?

Mr. Clarke: I explained a few moments ago in response to another question the basis of the policy that we follow in London. To some extent we are shifting resources from inner London to outer London in following the population. It is the population that needs the treatment that we must provide. Within the area that the hon. Gentleman represents we must shift resources from surplus acute provision into the development of community services, which many of his elderly constituents very much need.

Dr. Mawhinney: Does my hon. and learned Friend accept that the level of resources available in the Health Service would be increased if he were to require all doctors in the service to prescribe drugs generically?

Mr. Pavitt: Hear, hear.

Mr. Clarke: My right hon. Friend has already referred to the reduction in the Health Service's drugs bill that we have achieved this year. We are considering closely the workings of the price system and the recommendations of the Greenfield report. We accept that, when looking for economies and better value for money, we must seek sensible economies in the drugs bill, as we seek sensible economies in the use of other resources.

Regional Health Authorities

Mr. Dubs: asked the Secretary of State for Social Services which regional health authorities will have a net growth in capital spending after the implementation of the proposals announced by the Chancellor of the Exchequer on 7 July.

Mr. Kenneth Clarke: Planned capital expenditure by regional health authorities is being reduced this year by about £13 million. This will still enable all regions to maintain substantial programmes of investment in building new and upgrading existing capital stock.

Mr. Dubs: Is not the truth that the hospital closures that will follow from the Government's policies on Health Service expenditure will have the effect, certainly in the London area, of penalising some of the most disadvantaged communities in Britain and removing any freedom of choice that these people might have in health care?

Mr. Clarke: The largest cuts in capital spending by the Health Service and, therefore, the longest delays in new hospital building, took place in 1976 under the previous Labour Government, when their economic policy fell into ruins in the wake of the IMF's intervention. The hon. Gentleman's constituents need a pattern of services that meet patient requirements now. That need will not be met by the unnecessary retention of surplus acute beds in old hospitals. It will be met instead by the growing provision of community care in place of that surplus provision.

Mr. Rogers: As the Minister has prefaced many of his answers either by saying "This is the truth of the matter" or "This is the real truth of the matter", would he like in future to tell the House when he is being honest?

Mr. Clarke: It is my recollection that I answered many questions which were prefaced by the phrase "Is not the real truth that", which I refuted. I am reminded of the following quotation:
What is truth? said jesting Pilate; and would not stay for an answer.
That is the attitude of most Labour Members on the National Health Service.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Freud: asked the Prime Minister if she will list her official engagements for 26 July.

The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others, including one with President Kyprianou of Cyprus. I also attended a service to mark the 150th anniversary of the death of William Wilberforce. In addition to my duties in the House I shall be having further meetings later today, including one with Sir Joshua Hassan, Chief Minister of Gibraltar. This evening I hope to have an audience of Her Majesty the Queen.

Mr. Freud: Is the Prime Minister aware that her Minister with responsibility for the arts said on 7 March in the House that building work on the Theatre museum in Covent Garden was planned to start in May? Will she tell the House why it is that ministerial promises made at the Dispatch Box are broken?

The Prime Minister: Because we all have to live within available resources, even the hon. Gentleman. My noble Friend the Minister for the Arts is examining what might be done to achieve a start before the end of the current financial year, but he can make no promises at this stage. The Government remain committed to the project. There is no change of policy.

Mr. Beaumont-Dark: In discussions with the IMF, did my right hon. Friend get the United States Government to realise which the grant to the International Development Association which they are supposed to make will be cut by $4 billion? Does my right hon. Friend agree that if this trend continues the United States Government will be heaping poverty upon tragedy for the poorest countries in the world?

The Prime Minister: As my hon. Friend knows, we have supported increased resources for the IMF, believing it to be in the interests of those countries in need of help


that apply to the IMF and to the rest of the world, that such countries follow a disciplined regime that is likely to get their finances back on track. For that purpose, the IMF must have sufficient resources. We shall continue to support the demand for the increased resources that have been required.

Mr. Foot: Will the Prime Minister tell the House what information she has sought and received from the President of the United States about the serious actions being taken by the United States Government in Central America? What messages has the Prime Minister sent to President Reagan in return?

The Prime Minister: We would not normally expect to be informed of military exercises, which I understand are to take place within the next six months. We firmly support the President of the United States in the speech that he made to Congress towards the end of April, which set out his fundamental policy and pointed out that out of the aid that the United States gives to Central America and the Caribbean basin, three quarters goes to food, fertilisers, and other things that are necessary for economic development. Only 25 per cent. of the funds go to military aid.

Mr. Foot: Does the right hon. Lady not think that the series of events over the last few days in respect of this matter are very serious—;the sending of thousands more troops to Honduras, the blockade of Nicaragua, the trebling of United States advisers in E1 Salvador and the extension of CIA action over a wide area? Does she not agree that these are serious developments? Has she taken the trouble to read what the New York Times has to say on the subject—;that the United States is drifting to war? Should not the British Government be informed about events, especially when the Secretary of State for Defence is in the United States making speeches on the subject? Were his speeches intended to lend support to the American Government's actions? Will she support what she signed at Stuttgart a few days ago, declaring that action should be taken by peaceful as opposed to military means?

The Prime Minister: Yes. We also support the statement of the Contadora group. I hope that the right hon. Gentleman will say that he supports the four basic goals in Central America which President Reagan enunciated in his address to the joint session of Congress on 27 April 1983. I hope that the right hon. Gentleman will recognise that the immense amount of non-military aid that the United States is putting into the area is constructive. Moreover, I hope he will recognise that Cuba has 10 times the number of military advisers in Central America as the United States.

Mr. Foot: Is the right hon. Lady really saying that she supports the latest military action of the United States? If so, she most certainly does not have the support of the country.

The Prime Minister: The United States is free, as is this country, to make its own dispositions on military exercises. That is what it has done. I remind the right hon. Gentleman of what I said. Cuba has 10 times the number of military advisers in central America as the United States.

Mr. Rogers: Speak for Britain.

Mr. Hal Miller: asked the Prime Minister if she will list her official engagements for Tuesday 26 July.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Miller: Has my right hon. Friend yet received a copy of the report of Friday's debate on regional industrial development, and the debate on the west midlands, which took place last night? Is she aware that those debates showed a remarkable unanimity of opinion across the country and the Chamber that regional industrial development grants are defective in that they do not promote employment in black spots but discriminate against companies that are already established and trying to stand on their own feet? Will she therefore ensure that when the Department is ready with its proposals a White Paper is published so that we might all take part in a serious and necessary debate on the subject?

The Prime Minister: I am aware of the feeling, when we try to secure inward investment in those regional areas, that some firms receive heavy subsidies and compete with firms just outside the designated areas that have hitherto stood on their own feet. We are examining regional policy with a view to making it more effective in the creation of jobs. At the moment, some rulings mean that there are often capital reliefs in the regional areas which displace, rather than create, jobs. We shall publish the results of our review of regional policy when we are ready to do so. I know that my hon. Friend has a special interest in the west midlands. I remind him of what we have done to support British Leyland, which is fundamental to the life of the west midlands. I also remind him of the small firms engineering grant, which we increased at the previous Budget with the west midlands strongly in mind.

Mr. Beith: When the Prime Minister took part in this morning's Wilberforce anniversary service, did she reflect on the fact that he overturned British economic and political support for a form of oppression, and that it has always been an objective of British Governments to end oppression no matter what part of the world it occurs in? Did she also reflect on the fact that there are times in a nation's history when people in the churches must speak out against prevailing wisdom rather than say what the Government would like it to say?

The Prime Minister: Indeed.

Mr. Skinner: I reckon that is a leadership bid.

The Prime Minister: I therefore take it that the hon. Member for Berwick-upon-Tweed (Mr. Beith) strongly supports President Reagan's statement to Congress on the vital goals in Central America
In response to decades of inequity and indifference, we will support democracy, reform and human freedom".

Mr. James Hamilton: While the Prime Minister is talking about Wilberforce will she bear in mind the Strathclyde region report pointing out that one in five of its population are at or below the poverty level? Will she seriously consider those circumstances and change her policies, as it is only by a change of policy that Strathclyde region will avert problems on a massive scale?

The Prime Minister: Yes, but to create new jobs it is not enough to make speeches about the subject, as the hon. Gentleman knows. We must create genuine businesses that sell genuine goods to people who are prepared to purchase goods or services. The hon. Gentleman will be aware that the retail trade is operating at a record level. That means that many goods are being sold to meet demand, but too


few of the goods are being produced here. There is an opportunity there and we must find ways in which to take advantage of it.

Mr. Andrew MacKay: asked the Prime Minister if she will list her official engagements for 26 July.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. MacKay: During her busy day will my right hon. Friend take time to welcome the decision of the TUC to meet the Secretary of State for Employment to discuss the operation of union political funds and the political levy? Does she agree that, as only 39 per cent. of trade union members voted for the Labour party at the general election, it is high time the trade unions considered severing their links with the Labour party, as the secretary of the Civil and Public Services Association suggested recently?

The Prime Minister: What my hon. Friend has said about the TUC is welcome to many people, including many trade unionists, who believe that the trade unions have an important role to perform but that that role would be performed better if they were not linked with a specific party. I also welcome the TUC's agreement to consult my right hon. Friend the Secretary of State for Employment, who was a secretary of a trade union.

Mr. Hoyle: Will the Prime Minister take time off from her engagements to reflect on the proposed cuts in the National Health Service in the light of her statement in Edinburgh that the Health Service was safe with her? As she said that there would be an increase in spending of £700 million this year, £800 million next year and £700 million the year after, has she not deceived the public? Is that not a matter calling for her resignation?

The Prime Minister: No. I stand by what I said then.

Mr. Simon Hughes: asked the Prime Minister if she will list her official engagements for Tuesday 26 July.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Hughes: In view of the Prime Minister's participation earlier today in the thanksgiving service for the life of William Wilberforce and with it the passage

—;by a Liberal Government— of the Abolition of Slavery Act 1833, will the Prime Minister reaffirm Britain's support for the rights and freedom of oppressed people and ensure that British banks do not guarantee credit to the Polish Government until the rights and freedoms of the citizens of Poland are guaranteed after the ending of martial law?

The Prime Minister: We shall continue to support the search for human rights where they do not exist. We shall continue to do everything that we can to help the people of Poland. It is doubtful whether the new Government proposals in Poland are substantially different from those of military government. We shall continue to examine events closely.

Mr. Tapsell: Might it not be worth recalling that William Wilberforce was a High Tory?

The Prime Minister: And his movement to abolish slavery was in keeping with High Toryism.

Mr. James Lamond: Before the Prime Minister gets carried away—;[Interruption.]—;reading us lessons about freedom, democracy, President Reagan and her support for his policies, will she let us know what she will say today to President Kyprianou when he asks her to help him to get rid of the troops of the Turkish Government, a pillar of NATO, that have occupied Cyprus since 1974, despite the guarantees that we gave? They have occupied the territory of a member of the Commonwealth, a signatory to the Helsinki final act and a country that has asked for the world's help for the past nine years.

The Prime Minister: I have already seen President Kyprianou of Cyprus and we had a long talk about the problems of Cyprus. Obviously we do not want that country to be partitioned. It has, in effect, been partitioned for some years. But we have made our view clear to Turkey and to the Turkish Cypriots that we are against the separation of the northern part of Cyprus and wish Cyprus to continue in a state of unity, as it did nine years ago, before it was rudely upset. The President of Cyprus and the British Government believe that the best way to pursue the objectives is as they are being pursued now—through the good offices of the Secretary-General of the United Nations.

Danish Ships (Subsidies)

Mr. Robin Maxwell-Hyslop: (by Private Notice) asked the Minister of Agriculture, Fisheries and Food to halt the payment of subsidies to Danish shipyards until the propriety of Danish local and national subsidies has been investigated.

The Secretary of State for Scotland (Mr. George Younger): I have been asked to reply, as I have joint responsibility for the Fishing Vessels (Acquisition and Improvement) (Grants) Scheme 1981.
In the case that has given rise to today's press reports an offer of grant under the scheme has already been made by the Sea Fish Industry Authority and has been accepted by the partnership of fishermen constructing the new vessel. They have now concluded a contract with the Danish shipyard involved. A legal obligation to pay the grant therefore exists and there can be no question of halting payment of subsidy in this case.
Under the scheme, grant may be paid for the construction of vessels overseas. To rule this out would deprive fishermen of the chance to take advantage of competitive prices where these are fair. In the present case, careful investigations by the SFIA and the Department of Trade and Industry were made. These reveal no basis within the rules of the scheme for withholding an offer of grant. The new information about subsidies in Denmark, mentioned in today's press reports, has already been drawn to the attention of Government and urgent inquiries are being made through the embassy. If unfair practices are revealed, grants will be refused in future.

Mr. Maxwell-Hyslop: Although I am grateful to my right hon. Friend for his reply as far as it goes, he has not said anything about the subsidies from the shipbuilding fund that can be paid to countervail unfairly subsidised foreign competition, or why a subsidy from that fund was not paid to enable the United Kingdom firm to match the Danish price. Will my right hon. Friend be in contact with the Secretary of State for Trade and Industry on that point, in respect not only of this case, but of any other cases that may arise. Is this not a further example of the practices to which the Danish national Government and local government give vent in, for example, maintaining a rate of duty on Scotch whisky that is imported into Denmark that is not balanced by an equivalent rate on Danish-produced schnapps?
We have yet another example of unfair competition within the EC. Should we not penalise those involved by methods that are within our power, such as through subsidies paid to fishermen when they order equipment from foreign firms?

Mr. Younger: I appreciate my hon. Friend's concern. We must remember that the main object of this scheme is to help fishermen with the costs of vessels that they want to buy. On the more general shipbuilding scheme, I am mindful—;as I am sure that my hon. Friend is—;of what my hon. Friend the Minister of State, Department of Trade and Industry, said on 18 July in this House. However, I shall draw my hon. Friend's comments to his attention.

Mr. John Evans: Is it not remarkable that British taxpayers' money should be used

to have ships built abroad, thereby putting British shipbuilders out of work? Surely subsidies should be given only when vessels are built in this country.

Mr. Younger: I appreciate the hon. Gentleman's argument, and it is obviously attractive. However, it must be remembered that the scheme is designed to help fishermen with the costs of their vessels. In this case the sad fact is that if the fishermen had bought the vessel in this country and had done without a grant, they would still have paid more for it here than in Denmark.

Mr. Albert McQuarrie: My right hon. Friend will be aware that the main reason for raising this subject today is that Campbeltown shipyard lost an order because its tender was 25 per cent. higher than that of a Danish shipbuilding firm. The subsidy, which is granted by local and regional development authorities—;not by the Danish Government—;amounts to more than is paid to a British shipyard worker, yet the Danish Government stipulate that no subsidy should be paid to any shipyard if it would then be in competition with another member of the EC. Will my right hon. Friend take up the matter? Out of 85 workers, 40 have been given their redundancy notices in one of the most successful shipbuilding yards in Scotland.

Mr. Younger: I very much appreciate that point. In the past few years we have often made special efforts to try to help Campbeltown shipyard, and on most occasions we have succeeded in helping it in material ways. Unfortunately, in this case the fishermen concerned would not have chosen to buy the vessel from that yard, because it would still have been more expensive, even without the grant.

Mr. David Penhaligon: Can the Minister give the whereabouts of the fish that this extra boat will enable British fishermen to catch?

Mr. Younger: I do not understand the hon. Gentleman's difficulty. The United Kingdom's fishing quotas are large enough to exceed any of the actual fishing done by the United Kingdom's fishing fleet in any of the past 10 years.

Mr. Tam Dalyell: Is it not high time that Ministers looked at the whole system of Danish shipping subsidies? How come the British Government have chartered the Herta Maersk at an undisclosed but substantial fee to convey 12,000 tonnes of fresh water from Auckland instead of using an easily available British tanker? Why do the Danes have—;

Mr. Speaker: Order. I think that the hon. Gentleman is very wide of the question.

Mr. Younger: I do not know the circumstances of that case. Obviously, it is in the interests of everybody that, whatever the task, it is done at the cheapest possible price.

Mr. Bruce Millan: Yes, but is it not absolutely intolerable that British taxpayers' money should go to subsidise boats that are being built in Danish shipyards, when our shipbuilding industry is desperate for orders? It is not good enough for the Secretary of State to say that there is a legal obligation in this case and that he cannot do anything about it. Is it not a fact that the assertion and allegation made by the Campbeltown shipyard, which has laid off 40 men because of its inability to obtain the order, is that the order has been obtained for


the Danish yard because of unfair local and national subsidies in Denmark? In those circumstances, there can be no question of the order simply standing. It is up to the Government to see that the order is cancelled and that the work is put into a British yard. British shipyards are desperate for work and it is absurd that such work should go overseas at our expense.

Mr. Younger: I appreciate the right hon. Gentleman's comments, and they sound all very fine, but the fishermen concerned are certainly not prepared to buy a more expensive boat than they could get elsewhere. My information is that the fishermen who are ordering the boat have no intention of buying it at a higher price elsewhere.

Mr. Millan: The Secretary of State has missed the point. The allegation—;apart from the principle of the scheme, which we believe should be reconsidered because it is absurd that such orders should go abroad—;is that this order was placed in Denmark because hidden subsidies were available to the Danish shipyard. Will the Secretary of State examine that matter, or does he intend to accept it?

Mr. Younger: My original statement made it clear that I intend to examine the matter. We are considering it very carefully. I must make it clear that the trouble is that in this case, even with the grant, it would have been more expensive to buy the boat in Britain.

Public Expenditure Plans

Mr. Max Madden: On a point of order, Mr. Speaker. You will recall that yesterday you were most helpful in protecting the rights of Back-Bench Members, who persuaded a very reluctant Chancellor of the Exchequer to make a statement to the House about the disposal of capital assets, which he had seen fit to issue in a reply to a written question. Would you give similar assistance with the Government's public expenditure plans, which are the largest political issue in Britain today, the consequences of which touch the lives of every British person?
My right hon. Friend the Leader of the Opposition asked the Leader of the House during business questions on Thursday for a debate, or at least a statement, on the Government's public expenditure plans. If the Executive see fit to ask for time to make a statement, will you ensure that they encounter no difficulty from you? Today, unlike yesterday, there is an avalanche of statements from the Executive, but, alas, none of them relates to the public expenditure plans. If the Executive say that they wish to make such a statement, would you give Back-Bench Members every assistance, as you did yesterday, by allowing them to make it?

Mr. Speaker: The hon. Gentleman pays me a compliment, but I seek to do my duty by the House. I am not responsible for the organisation of Government business. I was here on Thursday, and I heard what was asked.

Mr. Peter Shore: Further to that point of order, Mr. Speaker. Is it not extraordinary that it is nearly three weeks since the Chancellor made his panicky statement about public expenditure cuts, but no details of the implications of those cuts have been laid before the House? Relating directly to your duties in the House, Mr. Speaker, and to your conduct of its business, did not yesterday's affair show that unless the Chancellor is willing to come forward and to confront the House, instead of leaking bits of information in written answers, the House's business is likely to be disrupted?

Mr. Speaker: Yes, I think that yesterday we saw Back-Bench Members of the House of Commons making plain their wishes, and they succeeded.

Public Transport (London)

The Secretary of State for Transport (Mr. Tom King): With permission, Mr. Speaker, I should like to make a statement.
I am today publishing a White Paper on Public Transport in London. Copies are available in the Vote Office. The White Paper sets out our proposals for fundamental changes in the way in which public transport in London is organised and financed. The present system has served the travelling public and the transport operators badly. Since 1970 costs in London Transport have risen way beyond inflation; public subsidy has risen thirteenfold, and fares have doubled in real terms. Last year the all-party Transport Select Committee unanimously recommended that the improvement of transport facilities in London should be regarded as a national priority and that responsibility for transport should be moved from the Greater London council.
The Government have accepted this need. As the first step we intend to reform the London Transport Executive into a new body on the pattern of a holding company with separate subsidiaries for bus and underground services. That new body— London Regional Transport— in addition to control of the subsidiaries, will have a wider responsibility for securing efficient public transport for London. It will be required to encourage other private or publicly-owned operators to provide services where they can be offered more efficiently and cheaply. I shall establish new liaison arrangements between British Rail and London Regional Transport to secure the maximum benefits from closer co-operation between them. Our proposals also include a reserve provision for London Regional Transport to take over responsibility for grant allocations to British Rail's London commuter services at a later stage, if experience shows the need for it.
I emphasise three points. While the Government's proposals for the abolition of the GLC would, in any case, have required new arrangements for transport, these proposals are right in transport terms. They will end the inefficient arrangements under which British Rail and London Transport served two different masters. The key elements in our proposals are to get the different public transport operators working together and to encourage the provision of new and competitive services.
London's ratepayers will be protected from seesawing rate demands for public transport. London Regional Transport will instead receive a grant direct from the Government, and a compensating adjustment will be made in the financial support arrangements for London.
Responsibility for granting concessionary fares will in future rest with the London boroughs. The Government will consult representatives of the boroughs to discuss how best to consider the operation of the scheme.
The new arrangements are designed to improve efficiency and to get a better deal for the London traveller. I am publishing this White Paper at the earliest opportunity in this new Session as a basis for consultation with interested parties on the details of our proposals. I shall take such views into account in preparing the legislation that I hope to bring before the House in the autumn.

Mr. Robert Hughes: I thank the Secretary of State for making that statement to the House today.
The Select Committee on Transport report, published in July last year, has been overtaken by the Transport Act 1983, which received the Royal Assent only on 28 March this year, which laid out in great detail the relationship between the Secretary of State and the planning arrangements for London Transport. Is the right hon. Gentleman aware that that measure was driven or to the statute book by the use of a guillotine motion? Has not the Secretary of State, while praying in aid the reasoning of the Select Committee on Transport, completely rejected recommendation 21 about the composition of the metropolitan transport authority? The Committee recommended that it should be composed of members of the GLC, representatives of the London borough councils and of the shire county and district councils, in addition to the Secretary of State's nominees?
Will the Secretary of State tell us, because the White Paper is silent about this, how the holding company will be directed? Will it be directed by Department of Transport officials, by Ministers or by London Transport management, or will the Secretary of State simply nominate members to a board? Does the right hon. Gentleman agree that it removes all democratic local government choice from the running of London Transport?
The suggestion that the capital's transport system be taken away from the GLC and given to the London boroughs and that joint arrangements will be made later, will mean that pensioners' concessionary fares will be adversely affected. With the Minister's Tory friends in the London boroughs, the lowest common denominator will have its way, and there will be a reduction in concessionary fares. Is not the White Paper a prelude to the privatisation of any profitable parts that may be extracted from London Transport and an encouragement to local private operators to cream off profitable services? Has not the Secretary of State fallen into the same trap as did the Serpell committee, in that he is more concerned with finance than with transport policy, and that his objective consideration of such serious matters has been clouded by the Government's vindictiveness towards the Labour-controlled GLC?

Mr. King: I appreciate the difficulty of responding to a White Paper without enough time to study it. When the hon. Gentleman has had an opportunity to study it he may welcome some of the proposals. It will provide an opportunity for better co-operation and collaboration between London Transport and British Rail's commuter services—;

Mr. Nigel Spearing: They do that now.

Mr. King: —which can achieve substantial benefits for travellers in London.

Mr. Spearing: What an excuse.

Mr. King: We have not followed every detail of the Select Committee's recommendations. The hon. Gentleman will know that the Select Committee could not reach agreement on the membership. It proposed generally that it might include members of the GLC and representatives of the London boroughs, the shire counties, the shire district councils and the consumer committees. The more one lists the possible membership, the more one sees how far we have moved towards the


alternative approach, which is the only one that can work, of an efficient management board that is capable of running an important transport undertaking. That is the approach that we have adopted. I shall not prejudge the concessionary fares issue, as the London boroughs will want to consider it, but, before the GLC operated the present scheme, the boroughs operated a standard scheme for concessionary fares across London.

Mr. Terence Higgins: I welcome the publication of the White Paper. However, do not many of the serious problems of London Transport arise from the peak travelling hours? Will my right hon. Friend give further consideration to that aspect? Is my right hon. Friend aware that many people outside London believe that they are unfairly treated in the matter of concessionary fares because of the different age distribution in places such as Worthing compared with London? Therefore, will he consider the idea of a national standard?

Mr. King: We have always felt that it was up to individual authorities to determine appropriate concessionary fares for their areas, particularly as they are aware of the transport provision in their areas and the desirability or benefit of such schemes. This matter will need careful discussion in the weeks and months ahead.
I hear what my right hon. Friend says about the problem of peak hour travel, and understand his interest in this matter. I hope that the discussions with British Rail in London and the south-east region and with London Transport will enable us to achieve some real progress in improving the arrangements for facilities for Londoners both at and outside peak hours.

Mr. Sydney Bidwell: As the only London Member of the Select Committee that undertook the study, may I point out to the Secretary of State that we observed the necessity for state aid to the capital and massive capital expenditure, which cannot be undertaken by the GLC by raising rates and so on. I am sure that the right hon. Gentleman will agree with that. However, does he recall that we emphasised the necessity for having on that body representatives of the public in the shape of members of shire county and district authorities and of the GLC? We deliberately left the size of the committee fluid so that possibly, under an enlightened Labour Government, it could include representatives of the trade union movement and so on. Will the Secretary of State undertake, in the coming discussion on the White Paper, to change his attitude, because it would be easy to have elected representatives of the people to serve on the authority that will emerge?

Mr. King: The hon. Gentleman will know that the London Transport Executive does not include elected representatives of the people. The duty of the GLC is to approve the plans and the expenditure but not to interfere in the day-to-day running of London Transport. As a member of the Select Committee, the hon. Gentleman knows— I am grateful for his confirmation—; that the Committee proposed that responsibility for the executive should be removed from the GLC. One of the reasons for that was that the executive encompasses a much wider area than the GLC. The hon. Gentleman knows that although the Committee was not short of time, there would have

been real difficulty in establishing an elected membership. London Transport, with an efficient management board, is the right way to proceed. As I hall have responsibility for appointing the members, I shall be answerable to the House for those appointments and for the conduct of the people whom I appoint.

Mr. John Hunt: Is my right hon. Friend aware that his proposals will be warmly welcomed in the London borough of Bromley and throughout the Greater London area, where ratepayers have had to pay dearly for the politically-motivated fare experiments carried out by London Transport under the control of the GLC? Is my right hon. Friend confident that the creation of this new London Regional Authority will signal the return of sanity and responsibility to the financing of transport in London?

Mr. King: I recognise that no one knows better than my hon. Friend about the problems and distress caused to many of his constituents and to his local authority and travellers in London by the GLC's behaviour. I hope that the new proposals will lead to a more stable relationship plus a real improvement in the cost-effectiveness of the services provided, which is of great concern to the people of London.

Mr. John Cartwright: Does the Secretary of State accept that the travelling public want, not liaison between British Rail and London Transport, but the closest possible integration of services? Will the new arrangements be geared to achieving just that? Does the right hon. Gentleman also accept that if London is to have the modern public transport system that it needs and deserves, it will require a substantial capital investment programme? Will the new arrangements for London Regional Transport enable that capital to be made available?

Mr. King: The liaison arrangements are to achieve that better co-operation and integration of services to which the hon. Gentleman referred. For instance, the facilities for common ticketing, through ticketing or inter-change facilities are all part of the whole range of possibilities that are being developed, and on which more can be done. New developments in technology make it possible to achieve some exciting advances, which I hope to encourage.
As to the sums that will be available for investment, it is obvious that the more efficient the operation of the service, the greater will be the sums available. There has been inefficient working and unnecessary cost, and that has taken money away from necessary investment.

Mr. John Page: Is my right hon. Friend aware that after the raping of the ratepayers of Harrow by the GLC over the past few years, Harrow ratepayers will be delighted with these proposals? Will my right hon. Friend tell those of us who have not yet had the opportunity of seeing the White Paper whether he envisages the new regional authority taking responsibility for taxis and car hire firms throughout the London area?

Mr. King: I am grateful for my hon. Friend's welcome. I think that when hon. Members have a chance to study the White Paper, they will realise that it opens up interesting possibilities for the future of transport in London. It does not cover taxis, but I hear what my hon. Friend says.

Mr. Spearing: Is not the separation into separate subsidiaries of London Transport bus and underground


services a retrograde step, putting the c lock back to before 1912 and taking apart the merger that a Conservative Government agreed to in 1932? Therefore, is it not the opposite of the integration that the right hon. Gentleman claimed that he was seeking?
Will the Secretary of State assure us that the proportion of public support— and public support is found in capital cities everywhere—;will not be reduced by the change of funding by his Department rather than by the GLC? If so, what is the case for any change?

Mr. King: The opening comparison made by the hon. Gentleman is not particularly apt. The point of establishing separate subsidiaries is to draw attention to the fact that London Regional Transport will be responsbile not just for the management of those subsidiaries but for seeing how public transport services can best be provided within London. The envisaged structure would separate the new body from involvement in the operations. I do not think that the two parts, being adjacent subsidiaries within a holding company, mean the total collapse of communication suggested by the hon. Gentleman.
On investment, I refer the hon. Gentleman to the reply that I gave to the hon. Member for Woolwich (Mr. Cartwright).

Sir John Biggs-Davison: In view of my constituents' grievances over services and concessionary fares, will this White Paper—;which I welcome—;be followed by consultations not only with the London boroughs but with local authorities in Essex as well?

Mr. King: One of the points that I made to the hon. Member for Ealing, Southall (Mr. Bidwell) was that these proposals affect people who live in a much wider area than the GLC area. I am conscious that the White Paper involves not only 32 London boroughs, but 15 shire counties which are, in one sense or another, directly concerned about and involved in the efficiency of the London Transport system. The answer to my hon. Friend is yes.

Mr. Tony Banks: Does the Secretary of State agree that the White Paper proposals amount to a further deterioration of local democracy in London, because a publicly accountable authority will be made into a quango to which I understand the Government are much opposed? Is he aware that some of the areas that will be brought into the new authority do not have the same concessionary fares for old age pensioners as those provided by the GLC? Will he give an assurance, first, that fares will not increase under this new quango, and, secondly, that the old age pensioners' free bus passes provided by the GLC will be safeguarded?

Mr. King: I have already made a clew statement about concessionary fares, and there will be consultations. The Select Committee, with all-party support, proposed to remove transport control from the GLC. The hon. Member for Ealing, Southall believes that transport should be removed from what he called the democratic control of the GLC, although other people might use a different form of words to describe the sort of control exercised by that body during the past couple of years.

Mr. Banks: They can have an election.

Mr. King: The Select Committee's proposals would have established a substantial quango covering all London

traffic and roads. We have suggested converting London Transport to a more modest structure that could achieve most of the benefits envisaged by the Select Committee.

Mr. Sydney Chapman: Is my right hon. Friend aware that my constituents desire an adequate and efficient public transport service system for London with a fare cost that is met fairly by taxpayers, ratepayers and the users of that system? Provided those objections are met, my constituents do not care who runs the London Regional Transport. Is he aware that they do not expect any more or less accountability then they have with the British Rail suburban line that runs through the constituency? Is he further aware that they welcome the fact that there will be an integrated public transport system throughout the metropolis, which includes British Rail suburban lines?

Mr. King: London travellers should not be treated as a political football to gratify the aims and political ambitions of certain people in county hall. This is a serious industrial matter. A public transport undertaking of the size and complexity of the one in London deserves the best management that we can bring to it. It is my intention to provide that management. I believe that the public are anxious to see that achieved. There are 92 GLC councillors and 84 London Members of Parliament. I and my hon. Friend the Under-Secretary will be answerable to the House for the appointments that we make to the LRT.

Several Hon. Members: rose—;

Mr. Speaker: Order. We have a heavy day and another statement in front of us. I propose to call those hon. Members who have been standing, but I ask for much shorter supplementary questions.

Mr. Frank Dobson: Will the Secretary of State confirm that, if these proposals are accepted, Greater London will be the only part of the country where democratically elected local government representatives will not play a direct part in the planning and subsidy arrangements for transport in their area? Will he confirm also that his proposition contains no benefit to London ratepayers because he intends to withdraw rate support grant equivalent to the amount that the ratepayers are presently contributing to London Transport?

Mr. King: The White Paper proposes that we should maintain the relative position of London ratepayers and those in other conurbations. That is a fair approach.
The Select Committee was unable to resolve the problem of how to achieve a comprehensive approach to public transport in London, given the area that the system must cover. The Select Committee made no proposals on how to build in some form of elected membership. It will be a duty of London Regional Transport, when preparing its plans, to consult the local authorities. I shall be answerable to the House and to London Members. In that way I hope to solve what I think the House will recognise is a difficult situation.

Sir Anthony Grant: Is my right hon. Friend aware that his statement will be welcomed not just by London ratepayers but by taxpayers in other parts of the country who indirectly subsidise the antics of the GLC? Will he confirm that the new body will be unable to waste public money on party political advertising in the press, as the GLC did so disgracefully last year?

Mr. King: I know how strong feelings are in many parts of London about the way in which the GLC has abused its powers in so many ways. I hope that we can ensure that, under the proposals in the White Paper and under the legislation that I shall bring forward, we can provide a rather more stable and promising future for London travellers with local transport being managed professionally.

Mr. Norman Atkinson: Will the Secretary of State acknowledge that overwhelming numbers of Londoners will be opposed to these suggestions because he has thrown common sense out of the window and replaced it by sheer political ideology? How on earth can he talk about accountability if he proposes to set up a centralised holding company to which will be linked a labyrinth of public limited liability companies accountability for which will be confined to the board room?

Mr. King: The hon. Gentleman's opening remarks represent a serious attack on the all-party Select Committee's proposals. I sought to make that point clear in my statement. When the hon. Gentleman has a chance to read the White Paper, he will find that I have endorsed a number of the Select Committee's statements.

Mr. Edward Leigh: As a former member of the GLC's Transport Committee—;

Mr. Dobson: The hon. Gentleman made a mess of it, too.

Mr. Leigh: —may I congratulate my right hon. Friend on his excellent statement? Does my right hon. Friend agree that, if there is one thing worse than London Transport being run by the present regime at county hall, it is for it to be run by an undemocratic burgeoning bureaucracy like the Thames water authority, upon which I have also had the misfortune to serve?

Mr. Dobson: Creep.

Mr. Leigh: Will my right hon. Friend ensure that this is a true privatisation measure? Will he further ensure that the new company is subject to commercial disciplines and it is not just a juggling of responsibilities between public authorities?

Mr. Dobson: Sell water to the highest bidder.

Mr. King: I look forward to discussing these matters further with my hon. Friend. He will see in the proposals that this will not be a limited liability company.

Mr. Eric Deakins: Is not the replacement of democratic GLC control by that of the unelected Treasury a recipe for the end of cheap fares in London? Furthermore, does the Secretary of State recognise that his failure to give any assurances about pensioners' free bus and tube passes will lead to great anxiety among the many who live in Conservative-controlled Greater London boroughs where there will plainly be great reluctance to provide the subsidy necessary to maintain the present scheme?

Mr. King: I am sure that the hon. Gentleman is aware of the utter contradiction of his supplementary question. He accuses me of complete centralisation but asks me to remove from the boroughs the discretion to determine what is appropriate for their areas. I thought the hon. Gentleman believed in local authority freedom and discretion. I stand by the proposals in the White Paper.

Mr. Roger Sims: Does my right hon. Friend envisage that London Regional Transport will have any powers over British Rail in respect of the London commuter train services, or will its role be solely one of co-ordination and integration?

Mr. King: The initial proposal is that I should chair a liaison committee with which British Rail and London Regional Transport will be involved. I shall be seeking at the earliest date to obtain the maximum possible benefits from co-operation and co-ordination, the ending of duplication and overlap, better interchange arrangements and the various facilities and improvements that so many people feel are possible.
As my hon. Friend will see, the legislation will contain a reserve power which might later give London Regional Transport grant-making powers to enable it to take over responsibility for the payment to British Rail of the public service obligation grant for commuter services.

Mr. Simon Hughes: Given the shortness of the White Paper, will the Secretary of State assure the House that he has not yet ruled out including in the draft Bill some democratic participation in the authority to be set up to control London Transport? Will he grasp the nettle of integrating British Rail far more effectively than the proposals in the White Paper suggest? Will he consider the fact that London has an unused transport artery—;the waterways—;which, as far as I can see, is not referred to in the White Paper?

Mr. King: That is correct. That aspect could be worth considering.
On the hon. Gentleman's first point about democratic participation, I am sure that he will accept that it is a difficult problem because we are talking about a fairly wide area.
People are now commuting into London from as far away as Bristol and Leicester, and they have a right for their views to be considered as well. The problem of building in democratic accountability over this range is substantial. I believe that in the so-called "golden" days, London Transport was run in the way that I am now proposing. Some people may question whether democratic accountability, as seen in the last couple of years, is really the way to run London Transport.

Mr. Peter Bottomley: Does my right hon. Friend accept that the most important part of the White Paper is paragraph 10, which shows that over the last 12 years unit costs have gone up in real terms while services have gone down? Increased prices as well as increased subsidies show that London Transport is not providing the service that is needed. When are the ratepayers and travellers in my constituency likely to see British Rail fares on a par with London underground fares and when are the ratepayers likely to get an advantage from the new proposals?

Mr. King: I would not like to give a specific date, but my aim is to see early progress. There is the will and a recognition that there is considerable scope for improvement. When we talk of greater efficiency and getting value for money, many people think that we are talking merely about saving money, but that can also mean improvements in the quality of service in certain areas—and in many parts of London that is long overdue.

Mr. Ron Leighton: Does the right hon. Gentleman understand that his action in arrogating to himself such wide-ranging and dictatorial powers and eliminating any form of democratic participation by ordinary Londoners will be deeply resented in the capital? He has given no guarantees on the level of fares or travel concessions for the retired. Will he now use plain language—;not weasel words—;and say that there will be no increases in the real level of fares and that existing travel concessions will continue right across the capital in future?

Mr. King: The hon. Gentleman knows perfectly well that those answers will depend or, the authority's performance and on the decisions of the boroughs. I have stated in the House that the power of decision should not be taken away from local authorities. They will have the right to determine what should happen about concessionary fares.
I do not agree ith the hon. Gentleman's other point. The evidence is not on his side, but I shall not continue endlessly to repeat the arguments that I have already made.

Mr. Harry Greenway: Is my right hon. Friend aware that my constituents tad their fares and rates doubled by the GLC last year and that the lower fares introduced recently have been much lower for inner Londoners, whereas outer Londoners have not enjoyed a commensurate reduction? Will he see that this unfairness is overcome in the new legislation?
As to concessionary fares, is my right hon. Friend aware that successive Conservative and Labour administrations at county hall have supported the present level of pensioners' passes? Will he use his influence to ensure that those passes are maintained at the present level, irrespective of what happens outside the Greater London area?

Mr. King: On concessionary fares I clearly stated:
The Government will be consulting representatives of the boroughs to discuss how best to continue the operation of the scheme.
I hope that my hon. Friend will accept that that is the right way to proceed. It is wrong to read anything sinister into this, as Labour Members seem to do. That seems to be the proper way to proceed, and I hope that all hon. Members will endorse it. I hope that these proposals will genuinely be a more sensible way to proceed on the major problems and important issues connected with London's public transport. I am grateful for my hon. Friend's welcome.

Mr. Chris Smith:: Will the Secretary of State admit, as he failed to do in answer to my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), that under the provisions of paragraph 19 of the White Paper, the rate contribution from Londoners, including those from Harrow and Bromley, will be the same as at present? Will he also admit that the only difference will be that those London ratepayers will not have the power to elect the people who make the decisions on services, fares and rate contributions?

Mr. King: If the hon. Gentleman reads paragraph 19 carefully, he will see that it will depend on what is thought to be the appropriate level of contribution. I undertake that it will not swing around as violently as it has in recent years, to the great damage of ratepayers in London. The

hon. Gentleman will understand that it will be grossly unfair to ratepayers in other conurbations if London ratepayers did not have to contribute in that specific way.

Mr. Richard Tracey: I congratulate my right hon. Friend on introducing the White Paper. May we have some assurance that, for the benefit of the travelling public and the management of London Transport, this change will happen as quickly as is practicably possible?

Mr. King: I am anxious to avoid any unnecessary uncertainty for this important and major undertaking. I apologise if the White Paper has come forward in perhaps a shorter time than one might have wished for consultation, but it is important to carry the legislation through the House, with proper discussion, at as early a date as we can. I hope that vesting can go ahead at the earliest possible date thereafter.

Mr. Bryan Gould: If private operators are to be allowed to take their profits from the profitable services, will not the ratepayer be left with an even greater burden in respect of the unprofitable services?

Mr. King: The hon. Gentleman will have studied the proposals on the licensing of alternative services. I hope that he will recognise that there are areas in which new services or competition can make a major contribution to improving services for the public. I hope that the hon. Gentleman will bring his alert mind to bear on this issue and not be as negative as some of his hon. Friends who refuse even to entertain any suggestion that private enterprise can occasionally do things better, to the advantage of all concerned.

Mr. Nigel Forman: As tricky issues such as efficiency, public accountability and social obligations are involved, would it not be prudent for the Government to hasten slowly on this matter, contrary to what my right hon. Friend said, and to have a sensible, full debate on the White Paper before proceeding to legislation?

Mr. King: My hon. Friend will have heard my views on that earlier. We shall have a full debate and full parliamentary procedure on the legislation as it comes forward. I shall be more than willing to discuss these matters with my hon. Friend and any other hon. Members in advance of the legislation.

Mr. Alfred Dubs: At least twice this afternoon the Secretary of State has sought to justify the taking away of democratic control over transport from the people of London. He has done so by talking about London Members of Parliament having a direct line to him. How will that work? Is he saying that he is prepared to be answerable in greater detail than Ministers normally are to hon. Members on the day-to-day operation of the new transport authority?

Mr. King: I do not want this to be misunderstood, and I think that I have said it more than twice this afternoon. On accountability, an all-party Select Committee took the decision to take away democratic control of London Transport, as the hon. Gentleman calls it, from the GLC.

Mr. Spearing: Not a decision; a recommendation.

Mr. King: It recognised that it would need a far wider representation than the GLC. The Committee proposed that people should be brought in from a much greater area.


Therefore, it implicitly recognised that London Transport should be taken away from the so-called democratic control of the GLC. That is the issue that we must face if we wish to achieve a comprehensive approach to London's public transport issues, which affect an area that goes well beyond the GLC.

Mr. Neil Thorne: I, too, welcome the White Paper. Will my right hon. Friend bear in mind what happened 15 years ago, when the then Labour Secretary of State for Transport had to go on bended knee to the Conservative-controlled GLC to beg it to take on London Transport, because she was incapable of dealing with it herself? Will he please ensure that the very best people—;

Mr. Tony Banks: The hon. Gentleman means Tories.

Mr. Thorne: —are employed at the top of this organisation? Moreover, in the interests of my constituents, will he also ensure that the maximum use is made of private enterprise, particularly in peak transport periods?

Mr. King: I had better not get involved in the incapacity or otherwise of the then right hon. Lady to cope with those problems. However, these are difficult issues, to which the Select Committee said there was no easy answer.
I omitted to answer the question about accountability. The normal procedure regarding ministerial accountability will apply where ministerial appointments are made.

Mr. Robert Hughes: Will the Secretary of State admit that he has gone much too far in praying in aid the Select Committee? The Select Committee made 37 recommendations, the majority of which he rejected. Will he guarantee that, after the consultations have taken place, there will be a debate in the House so that Parliament may be consulted before the Bill is published and the legislative process begins?

Mr. King: As the hon. Gentleman knows, that is a matter not for me but for my right hon. Friend the Leader of the House, who will no doubt have heard what the hon. Gentleman said. I think that there will be ample time for parliamentary debate on these issues. I fancy that we shall spend many hours on them. I believe that that is the right way to proceed.

Steel Council

The Secretary of State for Trade and Industry (Mr. Cecil Parkinson): With permission, Mr. Speaker, I should like to make a statement about yesterday's meeting of the European Community Steel Council.
My hon. Friend the Minister of State and I attended the Council.
The central issue was whether to prolong the arrangements made under article 58 of the European Coal and Steel Community for mandatory production quotas. Ministers agreed that to provide the Community with market stability it was desirable to prolong the quota arrangements to the end of 1985.
The Italian Ministers, however, representing a caretaker Government, felt unable to impose such a long-term, legally binding obligation on future Governments. Because of that, the Council's formal decision was to prolong the arrangements to 31 January 1984, with a unanimous declaration of political intent to agree a further renewal to the end of 1985.
The Ministers accepted the need for member states to use this period of market stability to restructure their steel industries, in accordance with the Commission's decisions of 29 June. Those decisions recognised the British argument that we had made the major contribution to reducing European steel capacity and that it was now the turn of others to match those achievements.
The new production quotas also recognise what the British steel industry has already achieved. Our quota is to be increased by 380,000 tonnes of steel per year, which will benefit both the British Steel Corporation and the private steel companies.
Ministers also agreed to greater flexibility for private producers who face difficulties as a result of severe quotas. That should help our wire rod sector particularly. We also agreed to more effective monitoring and policing of the quota system.
The Commission will apply its price rules more firmly so as to tackle unfairly low-priced imports from other member states.
Another benefit to Britain is that we have been able to safeguard British Steel's exports of heavy steel sections, which might otherwise have been cut down by quotas.
While in Brussels, I raised the Port Talbot investment project with Vice-President Davignon and I am pleased to tell the House that he gave me a categorical assurance that approval for it would be given at the end of this week.
There is little doubt that failure to reach agreement on the quota regime yesterday would have led to damaging uncertainty in the steel market. I believe that the outcome of the Council is a very satisfactory one, which will help both British Steel's progress towards financial viability and our private sector steel industry.

Mr. Stanley Orme: We welcome the small increase in output quotas announced by the Secretary of State, as we welcome the Port Talbort decision. Nevertheless, it is a pitiful return for the burden that the United Kingdom has borne in cuts, with the loss of 100,000 jobs, or 65 per cent. of the work force, since 1979. The 380,000 tonnes represents only about 4 per cent. of the output lost by British Steel since May 1979.
What can the Secretary of State report about quota changes for the other EC countries? Will he confirm that


the gap between output and capacity in Britain is narrower than in any other EC country? Will he also confirm that no British firm has ever been fined under the quota system? Will he assure the House that the quotas will be policed effectively? He said that they would be monitored and policed. How will that be done?
Given the new quotas, will the Secretary of State now guarantee that there will be no more closures or further rundowns in British steel? What is the production forecast for 1983–84, bearing in mind that last year's production figure was the lowest since 1947?

Mr. Parkinson: I thank the right lion. Gentleman for his opening remarks. I agree that the quota of 380,000 tonnes is not so big as that obtained by some other countries, but it is substantial. I should not be breaking a confidence if I said that it is bigger than the industry expected.
I accept that there has been a substantial capacity loss in this country, but other countries will now have to go through the same painful process. A commitment was obtained from all member states for substantial capacity reductions, which will be enforced and without which there will he penalties on the quotas. Our share of those losses was 500,000 tonnes. The highest was 6·8 million tonnes, so some very substantial cuts will now be made by our Community partners. Our partners have committed themselves to those cuts, which will be monitored and must take place.
Our quota changes were at the top of the range. One of the reasons why our quotas were increased was that it was recognised that the British steel industry had made substantial capacity cuts and substantial improvements in productivity.
As to the gap between output and capacity being narrower, that was precisely why the cuts were necessary. British Steel simply could not afford to maintain huge spare capacity indefinitely. The fact that our output and capacity are nearer to each other than those of other countries, which the right hon. Gentleman regards as a criticism, is a sign of progress and of our industry moving closer to viability.
I confirm what the right hon. Gentleman said about no British firm ever having been fined under the quota system.
As to effective policing, the Commission releases the quotas quarterly, so individual states' performances will be measured and the Community will have that information available when it decides the next quota allocation. Member states which do not co-operate can thus be disciplined.
I cannot guarantee that there will be no more closures, but there will be no more closures arising from this agreement. We believe that the additional 500,000 tonnes for which the Community has asked is already provided for. First, we can establish that we have made more closures and have more closed capacity than the Community credits us with. Secondly, the Port Talbot investment envisages a reduction of 160,000 tonnes. Thirdly, there is mothballed capacity which may be taken out. Therefore, no closures should be necessary as a result of the agreement.

Mr. Hal Miller: I congratulate my right hon. Friend the Secretary of State on his robust defence

of British interests—; [HON. MEMBERS Robust?"] Yes, robust—;and better than the industry's expectations, if not better than the Opposition's delusions.
I was hoping that my right hon. Friend would say something about the possible end of this cartel system rather than leading us to expect that fixed markets and fixed prices for steel would continue apparently without any end in sight. I do not think that many of us thought that that was what the EC was about.
As for administration, what will happen when further quota measures are taken? Should not the combined quota total be available to the merged company?

Mr. Parkinson: I thank my hon. Friend for his remarks about my robust defence. Opposition Members are keen to compare import penetration in the British market with that in other countries. Import penetration in the steel market of France and Germany is approximately double that in the United Kingdom. We have fought the corner of the British steel industry and will continue to do so.
We expect the regime to run for 2½ years and it will be the last such regime. The industry will be fundamentally restructured during that period. The coin has two sides—;quota increases and capacity reduction. At the end of that period, Europe will have shed approximately 30 million tonnes of surplus steel capacity.
On administration of quotas, I think that my hon. Friend is referring to the small producers such as Glynwed. In that case, two small producers that qualify for exemption because of their size are, when they merge, just above the limit and are therefore penalised. We raised that point with the Commission, which realises its importance. We shall pursue the matter further.

Mr. John Morris: I welcome the Minister's categorical assurance about the hot strip mill at Port Talbot—;a disaster area of unemployment. The lack of interest by the Welsh Office is shown by the total absence of Welsh Office Ministers from the Treasury Bench.
Will the right hon. Gentleman clarify his remarks about the 160,000 tonnes reduction in capacity? Is there any need to wait for the end of the week, when Parliament will be in recess? How much additional money will it cost since the Government first announced their intention as long ago as last November? Does he understand that those who have campaigned long and hard for the mill will be happy only when there is full, formal approval and the work has begun?

Mr. Parkinson: We must wait until the end of the week because of a Community formality. The proposal has been circulated among the Commissioners, and the closing date for objections is 29 July. There will be no objections, but the formalities must be observed. The actual piece of paper cannot be issued until 29 July. The commitment is clear and specific. The go-ahead can be given and contracts can be signed. I am as pleased as the right hon. and learned Gentleman is about that.
The 160,000 tonnes capacity arises from the change in the process. It is part of the scheme to improve the viability of the mill. Taking out that 160,000 tonnes and modernising the plant will ensure a viable throughput. We expect Port Talbot to become a profitable and modern works.

Sir Anthony Meyer: I congratulate my right hon. Friend on the highly successful


outcome of the discussions. Can he think of any subject about which the Opposition talk more nonsense than they do on this? Is it not true that the job losses, which we all deplore, were necessary if British Steel was to become competitive? It has little to do with the cartel arrangements that are designed gradually to enable us to reduce capacity without too much pain.

Mr. Parkinson: There is some hypocrisy in the remarks made by Opposition Members. They know full well that, had they been elected in 1979, they would have had to restructure the British steel industry. They know that there was no way in which that huge over-capacity could have been kept down, except at a gigantic and unbearable cost to the taxpayer. The difference between us and the Opposition is that we have the guts to take some difficult decisions, as a result of which British Steel is now one of the most productive steel industries in Europe and has a bright future.

Mr. Donald Coleman: I confirm the welcome that south Wales will give the development of Port Talbot, but does the right hon. Gentleman recognise that the rejoicing will not begin until the work has begun? When will it begin? What steps will he take to ensure that the butchering of the British steel industry has come to an end and that the sacrifices that British Steel has made in the interests of European steel requirements are at an end?

Mr. Parkinson: The contracts for Port Talbot can be signed without further delay. That is one reason why we have been pressing the Community. It wants to start the work during the summer shutdown. There is an incentive for the company to get on as quickly as possible.
I did not answer the question about additional costs posed by the right hon. and learned Member for Aberavon (Mr. Morris). To date, they amount to nothing, but had the delay continued, by the end of the year we would have begun to run into a penalty period and the cost would have been £16 million. We are glad that permission is being granted and that the work can start without delay.
The real way to ensure that the British steel industry has a viable future is for it to continue to perform as well as it is now beginning to perform. I hope that everyone in the House is proud that it is now the most productive steel industry in Europe. We can all take pride in that.

Mr. Michael Fallon: Can my right hon. Friend tell the House more about the position of the Italian delegation? Is it still contesting the Commission's cutback figures? What sanctions will the Government support if it continues to do so?

Mr. Parkinson: The Italian delegation did not contest the Commission's figures for capacity reduction. It is a Commission decision and is binding on the Italians. They realise that they will have to reduce capacity. They qualify for aid only if they get on with that job. They accepted that part of the package and did not dispute it. They accepted it on behalf of all the political parties in Italy, and had political cover for doing so. The Italian steel industry will be restructuring itself. It will come forward with specific plans. It needs cash from the Community to do it; that is the incentive to get on with the job.

Mr. Richard Caborn: During the right hon. Gentleman's discussions with the Community,

did he mention the special steel sector in Britain—;something that the British Independent Steel Producers and the trade unions have been arguing about for some time? Is he aware that import penetration in that area, part of which does not fall under the Paris agreement, has risen in the United Kingdom from less than 12 per cent. in 1972 to more than 55 per cent. in 1982? Is he further aware that many redundancies in the Sheffield area have arisen because of that import penetration?

Mr. Parkinson: The Government are aware of the problems of the special steels sector. We raised the matter at the Council of Ministers yesterday and urged that the quota regime be extended to special steels. I am sorry to tell the hon. Gentleman that we were in a minority of one, and that our case was not accepted. However, we are taking action to press the Americans to think again about the quotas which they have imposed on special steels and which are biting on about £11 million-worth of special steel exports. The Community as a whole is seeking compensation from the Americans for that action. We hope that that will lead the Americans to the same conclusion that we reached when we acted in a similar way on synthetic fibres— that the game is not worth the candle. We hope that they will end the special tariff. We are keeping on the pressure because it is one way to help special steels.

Mr. Eldon Griffiths: As my right hon. Friend has brought back good news from Brussels, will he take advantage of the higher quota and the welcome improvement in productivity by British Steel to dispose of a restrictive practice in Britain? Is he aware that British Steel is charging the private sector higher prices for steel coil than the private producer would need to pay if he imported it from Europe?

Mr. Parkinson: I know that my hon. Friend has been in touch with the Department about that. We are investigating with British Steel and we shall take up the matter with my hon. Friend when we have the answer.

Mr. Ian Wrigglesworth: I welcome the Secretary of State's statement, but will he spell out in more detail the implications for the British Steel Corporation? Will the increased capacity safeguard the five steelmaking areas? Is the future of the Redcar works on Teesside assured?

Mr. Parkinson: The Government's policy is that set out in the letter by my right hon. Friend the former Secretary of State to the chairman of British Steel. My right hon. Friend told the chairman that he must make his corporate plan on the basis that steel production would continue at the five major sites, including Redcar. Nothing that happened yesterday and nothing discussed in the Council changes that in any way.

Mr. A. E. P. Duffy: Is the Secretary of State aware that this statement will be received with anger by redundant workers in south Yorkshire special steels, whose capacity and jobs have been needlessly destroyed in recent years by cuts that are now being restored? Will the Secretary of State now look at the projected closure of Hadfields in my constituency by the Phoenix tool works consortium? Otherwise, there will be no private steel to take advantage of the increased quota.

Mr. Parkinson: The regime does not apply to special steels. I read with interest the hon. Gentleman's speech in yesterday's debate. The regrouping of special steel companies offers the best hope for all of them of a viable future. Strong companies capable of competing with the best should emerge from the regrouping. The Government support that objective.

Mr. Stuart Bell: I agree with one Government Member that the Secretary of State has adopted a more vigorous approach over steel than his predecessor, who spread uncertainty and anxiety throughout Redcar and Teesside, where many of my constituents work in the steel industry. Can the Secretary of State deny a story in today's newspapers that, notwithstanding the agreements reached yesterday, about 6,000 further jobs in British Steel will be lost? Does the Secretary of State agree that as a nation we have made a far greater effort to reduce manpower than any other European nation?

Mrs. Elaine Kellett-Bowman: My right hon. Friend has already said that.

Mr. Bell: He may have said it, but I should like it confirmed.
I understand that the Commission will conduct a closer investigation of pricing policy, but is the Secretary of State saying that the Commission, or Council, is now prepared to adopt a more vigorous approach to the dumping of steel products in Europe? Is the right hon. Gentleman aware that such matters are of great interest to my constituents who work in the steel industry and that they would welcome any assurance that the Secretary of State can give?

Mr. Parkinson: I hope that what I said in my statement will help to prevent dumping. The Commission proposes that the minimum price which can be allowed—;it is the lowest price—;should, in the case of continental steel, recognise the cost of transporting and freight to the United Kingdom before it is ex-works, because the previous system helped to produce the type of dumping about which the hon. Gentleman complains.
I cannot comment on today's newspaper stories because I have not seen them. Nothing that was decided yesterday was based on the assumption that further cuts would have to take place and further jobs lost to implement the agreement. Other closures or job losses may take place, but not because of the agreement.

Dr. Jeremy Bray: Can the Secretary of State confirm that the proposed BSC-United States deal for the partial closure of the Ravenscraig and Fairless works is now dead? Will the practical effect of yesterday's decision be to reduce the fines paid by BSC for exceeding realistic production quotas because of the recovery in demand, or will the effect be to allow increased production?

Mr. Parkinson: The Ravenscraig slab deal is still alive and negotiations are continuing. It is wrong to assume that the deal is dead. Telegrams have been passing to and fro in recent days. Negotiations are firmly in train. I have not been party to them, but I am aware of what is happening. As for fines, British Steel believes that the agreement will lead to increased production.

Mr. James Hamilton: Bearing in mind that for a long time we have heard nothing but dismal reports from the EC, particularly in relation to the steel

industry, did the discussions include tube producing? Is the Secretary of State aware that the Clydesdale works in my constituency is in need of a concast plant which is a vital part of the investment to give the necessary impetus for competitiveness? Will the Minister take it from me that people in Lanarkshire are deeply concerned because nothing is forthcoming in relation to the deal between MacGregor and the American company? Are we right to assume that something is still going on? Is not the House entitled to know the position?

Mr. Parkinson: Mr. MacGregor is negotiating a commercial deal. Confidentiality is essential. The two parties are negotiating carefully. I am aware of that, because I have seen telegrams which refer to it through our embassy, which is giving support and help. I cannot tell the hon. Gentleman more than that and I do not think that I should. The deal is still alive and still being negotiated. The only time that tube came up yesterday was when we discussed the need for supplements for coil for tube. The Commission took that need on board and said that it would give an answer soon.

Mr. Paddy Ashdown: I welcome the statement, modest though it is. I particularly welcome the Secretary of State's comments about countervailing measures to protect special steel, but does he agree that the increasing protectionist and isolationist measures taken by the United States steel industry is the major threat to the future of such careful quotas as we have now negotiated? Is the right hon. Gentleman prepared to take any specific measures to resist such pressures and moves by the United States?

Mr. Parkinson: We have made it clear to the United States in various ways, through my right hon. Friend the Foreign Secretary and myself talking to the United States trade representatives, that we believe that it made bad decisions on special steels and that we hope that that bad precedent will not be followed in other areas.
The Community has the capacity to take action and it has gone to GATT to seek compensation under world trade rules for what we believe to be a wrong action by the Americans. We believe that the best way forward is to reinforce world trade rules and not to follow the Americans in trying to breach them. That is what we propose to do.

Mr. Dennis Skinner: Is not the real tragedy of the steel industry and the unemployment in that industry the fact that for four years the Government have lectured the House of Commons and the steel workers about the so-called free winds of competition and market forces which would enable the steel industry at some point to survive? The Secretary of State has had to come here today and admit that the only way to salvage what is left, or some of what is left, is Government intervention and quotas. Why all the misery of Corby and Consett and all the other steel towns and cities up and down the country? It has all been for nothing.

Mr. Parkinson: The tragedy of the British steel industry is that the Labour Government, of whom the hon. Member for Bolsover (Mr. Skinner) was a supporter of sorts, could not bring themselves to take the action that was vitally necessary. It was because that vital action was not taken that hundreds of millions of pounds were lost and a debilitated British Steel Corporation was in existence when we came to power. Actions taken by this Government have retrieved a solid core.

Mr. Skinner: This is market forces.

Mr. Parkinson: I entirely agree with the hon. Gentleman—;for the first time, I think, in many years. Our policy is to have a short-term regime, during which restructuring can take place, but that restructuring is a reduction in spare capacity. The policy of the hon. Gentleman's Government was exactly the opposite. They spent hundreds of millions of pounds on maintaining capacity that would never be needed.

Mr. Peter Hardy: Does the Secretary of State recall that it is just two weeks since he proclaimed boldly and clearly, in response to a question from me, that our European partners must effect their own restructuring before there could be any further contraction of the British steel industry? Is he aware that, while his words were echoing around this Chamber, the finishing touches were being put to the arrangements and to the statement that has destroyed another thousand jobs in south Yorkshire, wiping out capacity at Hadfields and perhaps at other steel works in and near my constituency? Does he not feel that that capacity being wiped out will give our overseas competitors an even greater opportunity?
Does the right hon. Gentleman believe that either the buoyancy that the EEC arrangements now confer on him or the freedom from the EC arrangements to which he referred should give him an opportunity to review the arrangements now being made in south Yorkshire, because the steel works in that area were more buoyant and were breaking more world records than those in any other part of the European steel industry, yet they are plunged into further despair and irritation as a result of European policies and the policies of this Government?

Mr. Parkinson: There was at least 30 million tonnes of excess capacity throughout Europe. We have made our own reductions, for our own reasons, because we could not afford to maintain a totally unviable steel industry. Other have followed the example of the right hon. Member for Salford, East (Mr. Orme), when he was in government, and maintained a capacity that they do not need. They will now go through the painful process which, fortunately, is now more or less complete in this country.

Mr. Allan Rogers: Will the Secretary of State at least acknowledge that he has made a most pathetic exhibition in Europe, and that the Italians have taken him by the nose yet again? Does he accept that for the past two and a half years they have broken all the rules, and that, although they should have put a deposit into central funds and been fined for increasing their steel production, they have not paid a penny in fines? Now, although it does not seem to have sunk in, in the euphoria of his return to this country, instead of an agreement for two and a half years, the right hon. Gentleman has one for only six months. Does the right hon. Gentleman accept that that is what the Italians have forced on him?
Will not the Secretary of State acknowledge that, once again—;looking not into the past but into the future—;we are being conned by our European partners, and that the Italians have no intention of staying within the quotas? They never have and they never will.

Mr. Parkinson: I had not realised that the House had acquired such an authority on the Italian steel industry.

Mr. Rogers: It is true.

Mr. Parkinson: The result of the agreement yesterday is that the Italian steel industry will shed 5·8 million tonnes and that the Italian steel industry has smaller quotas than ever before. So the hon. Gentleman's assertions are quite wrong. The Italians are now going through the painful process that we have already been through.
Also, the nine other members of the Community were totally agreed, and the Italians agreed in principle, that as a caretaker Government, they could not impose a regime of two and a half years. However, the regime will be renewed within the next seven months.

Mr. Tom Clarke: Will the Minister give us an assurance about his astonishing reply to my hon. Friend the Member for Motherwell, South (Dr. Bray), when he said that the slab deal is still under active consideration? Will he give us an assurance that no decision will be taken on this matter during the parliamentary recess? Will he reaffirm what almost every Minister has said on this subject, that the matter will not be concluded until Parliament itself decides?

Mr. Parkinson: The hon. Member for Motherwell, South (Dr. Bray) said that the negotiations had stopped. I said that they had not stopped. They are still alive, and negotiations are going on. I do not know when they will come to fruition. No proposals of any kind have been put to the Government. The only point that I made this afternoon was that negotiations are not over. I said no more and no less than that.

Mr. Orme: May I press the Minister on the subject of Ravenscraig? In the discussions that are clearly taking place about that plant and the special steel produced there, will he assure us that no decision will be made, certainly during the recess, and that the Government will make no statement about change of policy until the House returns, because we believe that it is crucially important for the House to be given a report?
I should like to raise a further point with the Minister. Time and again my hon. Friends have asked about quotas. The Secretary of State said that the quota system is on a short-term basis. We have had that system for a considerable time. Bearing in mind what our competitors and members of the EC do—;not just the Italians—;what does the Minister say about the West Germans, who owe about £50 million in fines? The West German Government are standing by their steel firms, and those fines are not being paid. Where does the policing come in there?

Mr. Parkinson: One company, Kloeckner, has been overproducing and has fines outstanding. Those fines will be enforced against it by the Commission. I repeat what I said earlier, because the right hon. Gentleman may not have heard what I said. The Germans and the French, who are constantly held up to us as people who know how to manage the market, have an important penetration into their market of more than double our own. Import penetration into our market is about 20 per cent. and falling. Theirs is approximately double that figure. Whatever else the figures prove, they do not prove that we have been taken for a ride.

Central America

Mr. David Winnick: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the increasing miliary involvement by the United States in central America and the danger to peace as a result of such involvement.
The matter is specific because the United States authorities in the past week have increased their involvement and military intervention in central America. They are determined to blockade and destabilise a country whose Government are not approved by Washington. A battle fleet has been sent to the area, and more military advisers— as Washington describes them— are being sent to assist the Government in E1 Salvador— a Government who have the seal of approval of the White House, and who, moreover, have been described by the former American President Carter as one of the most bloody in the region.
The matter is important because such military intervention by the United States can easily escalate, with the danger of another Vietnam—; this time in central America. It would also have grave consequences for international relations in places far away from central America.
The matter is urgent because of all the military dangers that are involved. The House should be in a position to express an opinion on this matter before we rise for the summer recess. Many people in the United States are deeply concerned, as my right hon. Friend the Leader of the Opposition said at Question Time. Newspapers, Senators and Congressmen in the United States understand only too well how the venture that is now being embarked upon by President Reagan can so easily escalate, with all the dangers that are involved.
We should have an opportunity to express such an opinion. I have no confidence that the British Government will express the sort of view that I believe should be expressed. Unfortunately, the Prime Minister, as we saw at Question Time today, echoes President Reagan. When abroad, Ministers simply echo and support what President Reagan is doing in central America. However, there is a different view here, as there was over Vietnam.
It would be most unfortunate if we were to rise for the summer recess— not to return until late October—without expressing a view on a military venture that could easily get out of control. The House of Commons should

be able to express its point of view. Labour Members should be able to say to President Reagan that many in Britain—;in the House of Commons and outside—;take the same view as many Americans on his Government's military venture in central America. That is the point of view that I hope can be expressed, and that is why I am asking you, Mr. Speaker, to grant my application so that we can debate the issue.

Mr. Speaker: The hon. Member for Walsall, North (Mr. Winnick) asks leave to move the Adjournment of the House for the purpose of discussing an important and specific matter that he thinks should have urgent consideration, namely,
the increasing military involvement by the United States in central America and the danger to peace as a result of such involvement.
The House has listened carefully to what the hon. Gentleman said, as indeed have I, but, as the House knows, under Standing Order No. 10 I am directed to take account of the several factors set out in the order, but to give no reason for my decision.
I have given careful consideration to the hon. Gentleman's representations, but I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Mr. Winnick: On a point of order, Mr. Speaker.

Mr. Speaker: No point of order can arise on that.

Mr. Winnick: On a point of order, Mr. Speaker. Without in any way challenging your ruling, if the situation worsens by tomorrow, bearing in mind the summer recess, will you be willing to consider another application without taking the view that that is an abuse of the Standing Order in question?

Mr. Speaker: That is a hypothetical question. We must wait to see what happens tomorrow.

BILL PRESENTED

TRADE UNION (AMENDMENT)

Mr. Jeff Rooker, supported by Mr. Robert Kilroy-Silk, Mr. Andrew F. Bennett, Mr. Frank Field, and Mr. Robin Corbett, presented a Bill to amend the Trade Union Act 1913 in order to provide for each member paying into the political fund the right to a vote in respect of certain elections; and for connected purposes; And the same was read the First time; and ordered to be read a Second time upon Friday 25 November and to be printed. [Bill 36.]

Sir Charles Gordon

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I beg to move,
That this House requests Mr. Speaker to convey to Sir Charles Gordon KCB, on his retirement from the office of Clerk of the House, its deep gratitude for all his devoted work in the service of the House throughout a long and distinguished career.
A motion such as this, Mr. Speaker, is the traditional way in which the thanks of the House are expressed to those who have for many years served in the highest posts in the Departments of the House.
Hon. Members will have learned with great regret that the present Clerk of the House, Sir Charles Gordon, will be retiring from the public service at the end of this month. He has spent 37 years in the service of the House, and has served as Clerk of the House since 1979.
The traditional qualities demanded of Clerks of the House have included authority in the knowledge of our practices and procedures; personal independence and integrity; impartiality as between parties and Members; and total devotion to the interests of Parliament.
Sir Charles Gordon has, throughout his career, admirably upheld those traditions. I am sure that many hon. Members, in the course of business, will have personal recollections of his fairness and courtesy.
After notable and hazardous service in the Fleet Air Arm, Sir Charles was particularly associated in the earlier years of his service here with the work of the Select Committee on Public Accounts. He also did much to establish and maintain valued links with Commonwealth and other Parliaments. Later he was closely concerned, along with many other procedural matters, with comprehensive reviews of our Question Time arrangements. More recently he has supervised the general revision of Standing Orders. He is the latest Editor of "Erskine May".
Since becoming Clerk of the House, Sir Charles has been much involved with the changes in the administrative structure of the Departments of the House that have resulted from the House of Commons (Administration) Act 1978. That was the first legislation of its kind for over 150 years. Its implementation has inevitably placed considerable new burdens on the Clerk of the House in his position as Chairman of the Board of Management. The experienced leadership which Sir Charles has given as Chairman of that board, and as adviser to the House of Commons Commission, has greatly helped in establishing the new arrangements.
All Sir Charles' friends here will hope that there will be a full and happy retirement ahead for him and Lady Gordon. I am sure that his enjoyment of that retirement will be all the greater because it will be in the recollection of a job well done, and in the knowledge of the gratitude of the House of Commons.

Mr. Michael Foot: I am happy to join the Leader of the House and others in supporting the motion. I am sure that Labour Members would wish to acknowledge the great services that Sir Charles has rendered to the House and the way in which he has performed them.
One of the first things that hon. Members discover when they arrive in the House, particularly Back-Bench

Members, is how much they rely on the Clerk of the House and those who uphold his services. As one who has spent most of his parliamentary life on the Back Benches, and who proposes to spend a considerable further spell there, I have a right to say that as much as anybody. Back Benchers would not be able to perform their functions with anything like the skill and success that they do if it were not for their discovery within a matter of a few weeks that the Clerks serve the whole House. They serve the Speaker, but they also serve the rest of the House, and they serve Back Benchers even more than Members of the Treasury or the Opposition Front Bench.

Mr. Dennis Skinner: I am not so sure about that.

Mr. Foot: My hon. Friend is experienced in the ways of the House. I know that he does not always need advice but there may come a time in the history of the House of Commons when advice may add to the brilliant skills that he brings to bear. Despite my hon. Friend's protests, I am sure that he too has relied on the advice that Sir Charles and others have given him in order to enable him to discharge his duties.
All hon. Members can go to the office of the Clerk of the House, ask for advice and receive it. The Clerks of the House are responsible for conducting that business and also for ensuring that that service is maintained. Sir Charles has certainly done it, not only during the four years that he has performed his service as Clerk of the House, but also in his service since 1946.
I was interested to see a reply of Sir Charles reported in "The House Magazine" when he was asked what advice he would give to the benefit of staff and Members alike. He said:
Don't be put off by criticisms of the House. It is not getting worse and worse"—;
I must say that he said that before he saw the present House of Commons, but that is a different matter—;
as people sometimes say it is. When I first joined in '46, there were scenes of equal liveliness in that Parliament.
As one who arrived here in 1945, the year before Sir Charles, I can confirm what he says. He went on:
When I commented on this to a very senior colleague, he merely shook his head and said 'Ah, but you weren't here at the time of Lloyd George's budget'.
They used to have some riotous times in that period as well.
I conclude as I began. I am sure that I speak for all Labour Members in thanking Sir Charles for his services. He has helped to sustain the traditions of the House of Commons. We shall have to wait to see what happens in the new Parliament. Each new Parliament behaves differently from its predecessor, but what Sir Charles said in that last statement to the House can also be of service to us in ensuring that the traditions of the House are sustained.

Mr. A. J. Beith: I should like to add a word of appreciation for Sir Charles Gordon and to express good wishes on his retirement on behalf not only of my right hon. and hon. Friends but of the other minority parties, including the Ulster Unionists and the nationalist parties.
The Leader of the Opposition pointed out that it is the task of the Clerk to advise all hon. Members—;BackBench Members as much as Front-Bench Members. In the


past two Parliaments it has been the lot of the Clerk to advise a series of parties and not simply the Government and the official Opposition. An important task that Sir Charles has carried out and sought to uphold in the work of his Department is that the Clerks serve not the Government but the House and the various groups of individuals within the House. We must always maintain that tradition and I pay tribute to him for maintaining it.
As the Leader of the House said, Sir Charles has had to carry responsibilities for management and administration which go far beyond those of Clerks in times past. It is not often realised in the House, let alone outside, how much the job of the Clerk of the House has changed in recent years. Sir Charles' work with the House of Commons Commission, of which he has been a faithful and devoted servant, deserves record and appreciation.

Question put and agreed to.

Resolved nemine contradicente,
That this House requests Mr. Speaker to convey to Sir Charles Gordon, KCB, on his retirement from the office of Clerk of the House, its deep gratitude for all his devoted work in the service of the House throughout a long and distinguished career.

Rate Support Grant (England)

The Secretary of State for the Environment (Mr. Patrick Jenkin): I beg to move,
That the Rate Support Grant Supplementary Report (England) 1983/84 (House of Commons Paper No. 26), which was laid before this House on 4th July, be approved.

Mr. Speaker: It will be for the convenience of the House to discuss at the same time the next motion:
That the Rate Support Grant Supplementary Report (England) (No. 3) 1981/82 (House of Commons Paper No. 25), which was laid before this House on 4th July, be approved.

Mr. Jenkin: The two reports and our debate are part of the long saga of successive Governments' efforts to persuade local authorities to keep their spending within what the nation can afford. The saga stretches well back into the previous decade. The first crunch came in 1975. That was the year in which local authorities overspent at today's prices by about £300 million. The House will recollect that it was one of my predecessors, the late Anthony Crosland who, speaking in Manchester town hall in May 1975, told local authorities bluntly "the party is over." The simple truth is that some of the guests are still carrying on their merry-making unrestrained by any thought of what either the nation or their ratepayers can afford.
My two immediate predecessors, my right hon. Friends the Secretaries of State for Defence and for Transport found themselves obliged to apply ever more stringent disciplines on local authorities to try to persuade them to budget responsibly. Many local authorities have done so but a good many—;too many—;have not. So we have had, in succession, block grants with taper, and targets with holdback. It is with the latter, for the two years 1981–82 and in the current year 1983–84, that these two reports are principally concerned.
In 1981–82 local authorities were budgeting above the expenditure targets laid down by Government. It was therefore decided to hold back Government grants worth £201 million. In the event, some of the local authorities concerned spent below their budgets. It is, therefore, right that the grant holdback should be reduced. The figure in the report is now £124 million. The main purpose of this third rate support grant supplementary report for 1981–82 is to implement that reduction.
The purpose of the other report—;the first 1983–84 supplementary report— is to implement the Government's proposals for block grant holdback for authorities that have budgeted in excess of their 1983–84 expenditure targets. On the basis of those authorities' budgets—;I stress that at this stage we can go only on their budgets—;the 1983–84 holdback amounts to £280 million. Both reports also make various technical adjustments, including a correction, in the 1983–84 report, of a mistake to authorities grant-related expenditure assessments and to block grant entitlements.
The two reports do not reflect any new policy or any new decisions by the Government. All they do is bring before the House the consequences for the relevant local authorities of their own spending decisions in the light of announced Government policy. When these reports were published at the beginning of the month, the right hon. Member for Manchester, Gorton (Mr. Kaufman) treated the announcement as though it were some terrible. new,


shock-horror story that I had somehow sprung on an innocent and unsuspecting local authority world. Of course, the right hon. Gentleman knew that it was nothing of the kind. Every authority named in the report knew how to calculate and almost certainly had calculated how much the grant holdback would be in respect of the two years in question. For the current year, 1983–84, the targets were announced a year ago. The details of rate support grant and of the holdback scheme were announced last December. As the right hon. Gentleman will know because he took part in it, they were approved after a debate in the House last January. So, when the authorities drew up their budgets for this year, they have what the consequences for their rate support grant would be.

Mr. Anthony Beaumont-Dark: Is that absolutely accurate? If one takes as an example the city of Birmingham which has a resource element based on 1972 values—;my right hon. Frend knows in another incarnation the problems of the west midlands—;how can it be only a technical problem when the west midlands district councils are being deprived of grant they need? My right hon. Friend says that these are technical adjustments. How can it be only technical when it is based on a valuation that is 12 years out of date? Does not my right hon. Friend agree that there should be a corrective multiplier, as has been suggested? That would give justice. It is not just a technical matter.

Mr. Jenkin: If I gave the impression that I thought that the consequences of the budget decisions that are dealt with in the reports are technical—;in the 1983–84 report they are purely technical—;that is not what I meant. I said that there are technical statements in the report as well but the reports before the House are the results of decisions on rate support grant and on the holdback arrangements described by my predecessor, now my right hon. Friend the Secretary of State for Transport, very fully in the debate in January. When those authorities fixed their budgets and their rates they knew, or could have known, what the effect could be. That is not simply a technical question.

Mr. Mark Fisher: Surely the Secretary of State understands that local authorities do not decide their rate after January. If he knows anything about local authorities he will know that decisions are starting to be made now for next year. It is far too late to announce a decision in January—;decisons are made in September or October. If the right hon. Gentleman does not understand that he should start to learn about the realities of local government.

Mr. Jenkin: I understand the hon. Gentleman's point. Last year my right hon. Friend the then Secretary of State was warmly applauded by local authorities when he was able to announce the targets in July. I hope that I shall be able to do the same if not in July—;we did, after all, miss a month for the election—;then early next month. I know that that too will be welcome. The most important thing for local authorities to know is what their spending targets are. That is important and was done.
The debate gives me an opportunity once again to spell out the Government's policy. It is important for all those who make decisions in this area to know what that policy

is. The Government have a clear commitment to control local authority expenditure. That commitment was endorsed at the general election last month when our manifesto stated clearly:
We shall maintain firm control of public spending and borrowing.
There should be no doubt in the minds of local authorities as to the strength of that commitment.
I should perhaps draw the attention of the House to one of the most astonishing statements that I have read from the pen of an Opposition Front Bench spokesman for a long time. The right hon. Member for Gorton had an article published in The Times of Monday under the title "Passing the Town Hall Buck". What he wrote demonstrated that despite his years as a Minister at the Department of the Environment his understanding of public expenditure is precisely nil. I shall read the key sentence in what the right hon. Gentleman wrote.

Mr. Gerald Kaufman: Why not read it all?

Mr. Jenkin: I am tempted to read it all because it is full of the most astonishing rubbish. I draw attention, however, to this one sentence:
As for rate-borne expenditure, it is of course balanced exactly by the rates levied on local taxpayers and so adds precisely nothing in net terms to public expenditure.
That is absolute nonsense. If that is what the right hon. Gentleman thinks, I suggest that he takes some elementary lessons in public accounting from some of his colleagues. For example, the right hon. Member for Leeds, East (Mr. Healey), who was in his place a short while ago, would be able to tell him, because he was Chancellor for six years. He knows that all local government spending counts as public expenditure. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who was also in the Chamber until a few moments ago and who is the new chairman of the Public Accounts Committee, could advise the right hon. Member for Gorton that he was talking absolute rubbish, that expenditure by local authorities is public expenditure and has been so defined by successive Governments for many decades.
The right hon. Gentleman will find that in public expenditure White Papers issued by the Government of whom he was a member local authority spending was treated as public expenditure. Whether it is financed by borrowing, by rate support grant or by rates, it is still public expenditure. By that one sentence in that article the right hon. Gentleman displayed a woeful ignorance, and he does not deserve to be treated as a serious commentator on these matters.

Mr. Kaufman: Does the right hon. Gentleman not understand that what is and what is not counted as public expenditure is simply a convention decided by the Government of the day? If one takes, for example, the borrowings of British Aerospace, by a miracle, when British Aerospace is a public corporation its borrowings are in the PSBR but when it has part of its shares sold off into the private sector its borrowings are taken away from the PSBR. It is simply a convention and I was saying in that article— I should be grateful if the right hon. Gentleman would read it all into the Official Report—;that I no longer accept that convention.

Mr. Jenkin: That is interesting. I am not surprised that the right hon. Gentleman changed the subject to British


Aerospace from local government. He has now made his position clear; he is no longer adhering to the canons of public expenditure to which every Labour Chancellor, certainly since I have been in the House, has sought to pay regard.
We regard local authority spending as public expenditure, as do the public and ratepayers, and intense pressure is being brought on my hon. Friends and the Government to do something about it. We have had some limited success in checking the growth of current spending by local authorities, and I gave some of the figures when I spoke last month in the debate on the Loyal Address.
It is salutary to remember that current expenditure by local authorities in England rose by 74 per cent. between 1978–79 and 1982–83, that it was somewhat higher than the rise in prices over the same period and that it occurred at a time when the Government were seeking reductions in real expenditure. That is why we have had to do certain unpalatable things, to which I have referred.
As I have said, there is no reason for any local authority to have been taken by surprise. Nevertheless, some of them disregarded the warnings and are now budgeting for expenditure over and above the guidelines. They now know the exact amount of grant that will be withheld from them unless in the coming months, as happened in the earlier year, they manage to reduce expenditure below what they have budgeted for, and I hope that many of them will take the opportunity to do that.
Perhaps one should look at the figures in more detail, and I will give a few of the more striking ones. Local authority budgets for the current year indicate that, in aggregate, targets will be overshot by lo less than £770 million, almost £¾ billion. How much of that is attributable to the GLC, ILEA and the metropolitan counties? The answer is £470 million of the overspend; 61 per cent. of the total is attributable to those eight authorities, all of them Labour-controlled. It is not as if this performance by those authorities is an exception—;a flash in the pan—;because if we look at the pattern of spending between 1978–79 and 1982–83 we find that those authorities alone almost doubled their expenditure, and they have become a grievous burden on the British people that can no longer be tolerated.
Lest Labour Members should think that we alone take this view, I point out that at the Labour party's local government conference in February, at which it discussed the restructuring of local authorities, there was no commitment to retain the metropolitan authorities. The right hon. Member for Gorton was extraordinarily silent about that, and many members of the press drew the clear implication that if Labour had won the election the metropolitan counties would have been abolished along with the shire counties, which he proposed.
To come back to spending, 23 of the top 25 overspending authorities, all of which are effectively controlled by Labour, account for 82 per cent. of the total budgeted overspend this year. These authorities have been egged on year after year by the Labour Front Bench in blithe disregard of the businesses that have been wiped out and the jobs that have been lost because of the high rates which have been imposed on commerce and industry.
The ordinary ratepayer and business man have declared, "Enough is enough". Successive Governments of all parties have asserted the right to set overall levels of spending compatible with their social and economic objectives. They have expected local authorities to accept

these broad objectives. Most local authorities have done so, and I recognise the valiant efforts that many are making to keep within the Government's guidelines.
Those authorities are doing a great many things to achieve that, and I will give a few examples. My hon. Friend the Member for 13irmingham, Selly Oak (Mr. Beaumont-Dark) mentioned the west midlands. He will know that in the metropolitan borough of Dudley outside consultants were brought in and identified savings of over £16 million to be achieved over five years. The savings derive mainly from the removal of unnecessary tiers of management, the simplification of procedures and working practices, the obtaining of better purchasing terms and reducing manning levels to reflect activity levels more accurately.
The second LAMSAC report on value for money, published in February this year, contained 56 examples, and the saving of £4½ million, and a further potential saving of £6½ million. The Government continue to encourage privatisation as a means of reducing costs. Many excellent examples showing modest but worthwhile savings were given in an interesting survey by Sandra Hardingham in the Local Government Chronicle last month. For example, in Calderdale the privatisation of daily office cleaning is expected to save over £23,000 a year. In Gloucester, there will be an annual saving of £24,000 from the privatisation of horticulture. I am glad to say that even Labour-controlled Middlesbrough is making use of private services in architecture and engineering.
Equally important has been the challenge of privatisation to in-house services. When faced with the possibility of privatisation, it was found, remarkably and suddenly, that costs could be cut quite sharply. The survey found that 18 local authorities got better deals in their refuse collection. Aylesbury district council found that it could save £100,000 a year.
Consider the question of manpower. The Department of the Environment is setting an important example in cutting manpower. Between April 1979 and April 1983, staff was reduced massively from 50,400 to 36,400. I pay tribute to my predecessors and to the staffs which have worked with them in achieving that reduction. If we allow for those who left because of a change in status, the net reduction is 13,000, or over a quarter of the Department's 1979 staff. We are not asking local government to make manpower cuts on anything like that scale, but surely it could do better than it is. After some limited reductions in manpower over the past three years, local authority manpower is beginning to creep up again. That is a tendency that must be checked. Cost-saving initiatives are especially important.

Mr. John Fraser: Does the right hon. Gentleman appreciate the distress that is being caused? Within the housing benefit system, which is in chaos, there are old age pensioners who are starving and distressed because they have been waiting for months for their benefit. On the other hand, the right hon. Gentleman penalises a local authority that takes on the necessary staff for a demand-led service to carry out a function that central Government have handed to local government.

Mr. Jenkin: Yesterday I chaired a meeting of the Consultative Council for Local Government Finance. It was said during the meeting that some of the staff increases


have been due to policies that have been imposed on local authorities by Government. Bearing in mind that many authorities have been able to continue to reduce staff numbers, I think that that argument needs to be considered with a pretty cold and calculating eye. However, I invited the associations to submit any hard evidence that they had to justify the proposition and gave an undertaking to study it.
Early next week I hope to announce expenditure targets for 1984–85. Once again, local authorities will have over six months before they have to set their rates. At the same time, the Government will publish their proposals on rate limitation.
Throughout our first period of office, the Government sought with great patience, if I may say so, to follow the path of co-operation, persuasion and encouragement. It is not the Government who have sought confrontation. Each year the Government have successively revised upwards their expenditure plans so that expenditure targets can take account of local government's real level of spending. That has happened as we have tried realistically to set targets for local authorities. Despite this constructive attitude, there remains a minority of irresponsible authorities—;the authorities are virtually all Labour-controlled—which is determined to undermine traditional constitutional relationships. It is these authorities which have forced our hand. They insist that their freedom to tax the ratepayers comes before the Government's duty to manage the economy, and that is unacceptable.
The duty to manage the economy is one that Ministers have to the House and for which they are accountable to the House. We do not have a federal constitution, and in a unitary authority it is the Government's duty that must prevail in the end. Therefore, we are left with no alternative but to seek new statutory powers.

Mr. William O'Brien: The right hon. Gentleman is talking about the decision of local authorities, especially those that are Labour-controlled, to raise rates. Surely the issue of rates should be for local communities to decide. They can make their decision on the basis of whether they are satisfied with the services that are provided at the price that they have to pay for them. The attitude of local authorities will be reflected in the ballot box. Why do we need to introduce legislation to do something that is already done by the democratic procedure? Does the right hon. Gentleman agree that that is the way in which democracy should function?

Mr. Jenkin: If the hon. Gentleman studies the election results on 9 June, he will find that the attitude of local communities was reflected in the ballot box. He will know that ratepayers turn to the House and to individual members for protection against exorbitant rate increases.
We still want to take every opportunity to pursue the co-operative approach. We are well aware of the effective savings that have been made by many authorities, and it is the performance of the majority that has put into high relief the failure of a few really extravagant authorities.

Mr. Toby Jessel: Is my right hon. Friend aware that I am anxious that he appears to have it in mind to reduce the grant of the Richmond on Thames borough council from £20 million to £18 million a year? This thinking flows from the fact that about two years ago,

in an attempt to hold down rates, the council drew on its balances. That course could not be repeated the following year because the balances were no longer available to draw upon to the same extent. That meant that the council had to introduce a considerable increase in the rates the following year. As a result, it attracted a penalty, which my right hon. Friend is now intending to impose on it. This is seen to be inequitable and I ask my right hon. Friend whether he is prepared to re-examine the position of the Richmond on Thames borough council.

Mr. Jenkin: I can assure my hon. Friend that my colleagues and I have been examining carefully how the target will affect individual authorities. The holdback has not been confined to rating levels, for it has been placed as well on the level of expenditure. The tables show that the majority of authorities have been able to budget within the Government's expenditure targets. It is not asking too much of local authorities to continue to make the utmost efforts so to budget.
After consultation we shall introduce a Bill early in the new year that will give us power to select for rate control those authorities whose past spending has been clearly excessive. The new selective system will apply to the rates to be set for 1985–86. Obviously it cannot apply until the Bill is on the statute book. The Government hope that the selective limitation on rates, coupled with the rate support grant with taper, will bring local government spending within public expenditure plans. However, there remains the possibility that even this will not happen, and so there will have to be introduced a fallback power for limiting rate increases that are imposed by local authorities generally.
The majority of authorities need have no fear of selection. The authorities that face selective rate limitation have, even now, a chance to reconsider their stance as they prepare for the next rating year. It is for them to decide whether they want to be among the small band of councils in respect of which we shall have no option but to act. The general power, which I described as a fallback power, will be placed on the statute book, if the House agrees, in the hope that it will encourage authorities which might be tempted not to budget responsibly to take a more responsible approach. I hope that the power will never have to be put to the test. I know how unwelcome it will be to local authorities, especially to those whose record of spending would never bring them within a mile of selective control.
Our plans do not stop there. I have already mentioned the GLC and the metropolitan counties. In the early autumn the Government will publish a White Paper dealing with the abolition of these authorities. We shall set out in some detail our proposals for dealing with the functions they now carry out. These upper tier authorities in the metropolitan areas are an unnecessary and expensive tier of local government.

Mr. Ted Rowlands: They were created by a Conservative Government.

Mr. Jenkin: Their functions have changed. They are high spenders and the Government cannot continue to disregard the effects that they have on job-creating businesses and on the well-being of the ratepayers.

Mr. Simon Hughes: rose—;

Mr. Jenkin: I read in the press that the leader of the GLC has threatened to take to the streets if his authority is abolished. I think that many Londoners would regard that as a good bargain.
There are important decisions to make that will effect a number of services and involve tens of thousands of employees. That is why we intend to consult widely with those affected, including staff interests, before legislation is introduced. The Bill will not be introduced until the next Session. It will therefore be introduced in the autumn of 1984. If Parliament passes the Bill, the restructuring will take place on 1 April 1986. I am aware that a number of my right hon. and hon. Friends are anxious for the upper tier of authorities to be ended sooner than that. However, it is more important that we get it right than that we do it quickly. We must therefore allow time for proper consultation and time to draft the legislation carefully. If we rush it, I suspect that we shall get it wrong. I do not intend to get it wrong.
Rate limitation and the abolition of the GLC and the metropolitan counties represent major changes for local government. That does not in any way remove the obligation on local authorities to keep their spending under tight control and to do their best to live within the targets that I shall set. The reports spell out the impact on local authorities of overspending and, in the case of the earlier one, the adjustment to the grant as later figures have become available. They flow inevitably from decisions that were announced by my predecessors and which were approved by the House. I therefore ask the House to give the reports its approval.

Mr. Gerald Kaufman: In Jean-Paul Sartre's play "Huis Clos", four bitterly quarrelling people are locked in a room together.

Mr. Patrick Jenkin: All contenders for the Labour party leadership.

Mr. Kaufman: As will become clear, the right hon. Gentleman gives it a rather longer lifespan than the one that I am about to propose. By the end of that play, the four people learn that they are in hell rather than Brighton and that they are doomed to continue their quarrels for eternity.
During these seemingly endless debases on rate support grant reports, the House might feel that we also are cursed by a malign fate in having to continue them for ever. It is undeniable—;it emerged again in the Secretary of State's speech today—;that the Government have created a form of hell for local authorities. Each year, councils ritually submit their budgets to the Department of the Environment. Each year they are equally ritually told that they are spending too much. Each year some of them are punished and then, as if none of those preceding events had occurred, the Secretary of State for the Environment of the day forces local authorities through the ceremonial process all over again.
Now, of course, there are differences. Each year the method of compiling the expenditure ceiling is changed and each year the method of assessing the penalty is changed. From time to time exemptions from penalty are inexplicably allowed and just as mysteriously withdrawn. Last year and the year before that, for example, local authorities that spent above their ceiling but below the grant-related expenditure assessments were exempted

from penalty. There was never any logical justification for that. It was a political device to remove penalties from as many Tory local authorities as possible. This year, that exemption has been arbitrarily withdrawn for no better reason than it was introduced. It is a fact, however, that if the GREA amnesty was still in operation, 42 of the 153 authorities that are penalised in the 1983–84 settlement report would have benefited from that amnesty.
A Government change of mind is penalising 42 authorities which last year might have expected to escape. As it is, those 42 authorities have a justified sense of grievance—;but so have all of the 153 councils that are penalised in this supplementary report. All of them are being fined as overspenders, yet they are not overspending, for the simple reason that there are no overspenders. There are spending ceilings that have been arbitrarily laid down by the Secretary of State for the Environment and there are local authorities, which, for their own reasons, good in their eyes but possibly bad in the eyes of others, have decided that their budgets conform to criteria that are approved by their electors rather than by the Secretary of State for the Environment. That, in case it should strike Conservative Members as a novel notion, is what is known as local democracy.
The House wants to know what the future of local democracy is to be. On 6 July, the Secretary of State announced that he would publish a White Paper on the rating system towards the end of this month. There are only five more days in this month. Will the Secretary of State adhere to that commitment? He gave no sign in his speech that he would. [Interruption.] The right hon. Gentleman is now telling the House that he deceived it. I shall quote what he said on 6 July:
I shall make it clear in the White Paper that we shall publish towards the end of this month that the proposals in it represent the Government's considered response".—;[Official Report, 6 July 1983; Vol. 45, c. 280.]
The Secretary of State now says that he is breaking his word. Is that correct?

Mr. Patrick Jenkin: The right hon. Gentleman persists in living in a world of conspiracies, lies and deceits, all of which are of his own making. If he listened carefully to what I said, he would know that I said that I hope to publish the White Paper with the rate support grant targets early next month.

Mr. Kaufman: The right hon. Gentleman is breaking his word to the House because he said that the White Paper would be published this month. Next week is not this month but August. Moreover, next week Parliament will no longer be sitting and the right hon. Gentleman will not have to come to the House and justify his actions. He is now admitting that he is diving for the recess rather than coming to the House honestly with a White Paper that has already been drafted. He is deliberately delaying it to dodge the House. The Chancellor of the Exchequer did the same knavish trick yesterday and had to be made to make a statement.
We shall make further representations on this matter because we are not satisfied with that procedure, just as we are not satisfied with the fact that the Secretary of State has now told us that he is not prepared to present the targets—ceilings as they should more properly be described—;to the House before the recess. They were presented to the House last year before we went away. The right hon. Gentleman knows that he has them, so why is he not


presenting them to us? Presumably it is because he is afraid to come to the House and justify his actions on the ceilings as on the White Paper.
The right hon. Gentleman is withholding from Parliament and local authorities information about the extent to which he will invent local authorities' overspending for the next financial year. I shall demonstrate what I mean by inventing the overspending. Even if the concept of overspending as defined by ceilings that are prescribed by and penalties that are imposed by Ministers was acceptable, the report would be quite unacceptable. It categorises as overspenders in 1983–84 local authorities that it is impossible to demonstrate are overspenders, even if there were such things as overspenders. Less than one third of the financial year has elapsed and outturn expenditure for the relevant financial year will not be known for another two years or so. That is why we have the 1981–82 report now.
Having invented a crime, the Secretary of State is punishing local authorities that have not even committed it. Local authorities are being fined for overspending simply because they have announced their budgets. It is as if someone is to be fined for shoplifting simply because he has been found in possession of a shopping list. Not only is the crime invented, not only has no one committed it, but the fines are ludicrous. That is not surprising, considering the incoherence and incomprehensibility of the formula for assessing the penalties.
Let us look at the formula for assessing the penalties, as given in the main report, published in January this year. It states:
The principles in accordance with which the Secretary of State would propose to exercise his powers are as follows. He would set multipliers greater than 1 for authorities which exceed their expenditure guidance figures. The multipliers would be calculated so as to have the effect of continuously increasing grant-related poundages at the following rates".
There is then a list under "class of authority". We are told:
Additions to grant-related poundage are to be calculated by multiplying percentage overspend (calculated to four decimal places) by the figures below.
For example, the calculation for non-metropolitan districts is as follows: throughout the first 1 per cent. overspend, 0·1367p; throughout the second 1 per cent. overspend, another 0·1367p; for overspending above 2 per cent., another 0·6835p.
The report continues:
The split of the ratepayer abatement amount between tiers of authority in the same area is in proportion to each tier's share of grant-related expenditure (ie the same basis as the grant-related poundage schedule is split between tiers in this Report). The split between tiers of the abatement amounts would not be subsequently adjusted to take account of changes in share of grant-related expenditure made in supplementary reports.
That is the gibberish on which local authorities are penalised. As for those figures—;0·1367p, 0·6835p and the rest of it—;no one knows how the Government have arrived at them or how they did it. The Government have simply plucked them out of the air. It is scarcely surprising that the way in which those penalties fall on local authorities is little short of berserk.
I shall give the House some examples. Let us take my authority, which has been referred to, of Manchester, and compare it with Hounslow. Manchester is accused of overspending £3,264,000 and is accordingly being fined £715,000. Hounslow is accused of overspending £3,250,000, which is slightly less than Manchester, yet it

is being fined £3,512,000. That is five times as much as Manchester and more than its alleged overspend. Bradford is accused of overspending £2,847,000. It will be charged £598,000 for that prospective crime. Leicester is accused of overspending £2,815,000, which is slightly less than Bradford, yet its fine is £3,098,000. That is five times as much as Bradford and, once again, more than its alleged overspend.
Let us consider two inoffensive little Tory authorities— first-time offenders, one might say. Worthing is accused of overspending £121,000, and is being fined £39,000 for doing so. Malvern Hills has an alleged overspend of £120,000, which is slightly less than that of Worthing, yet at £139,000 its fine is four times that of Worthing and once again more than its alleged overspend. This is not financial control; it is Russian roulette. Those local authorities and many others that are equally illogically penalised do not understand their punishment for their non-existent crimes, and they cannot understand why on the one hand they are being urged by the Government to spend money, while on the other they face punishment from that same Government if they take their advice and spend the money.
This year, local authorities are being urged by the Secretary of State to commit funds for home improvement grants. Indeed, they receive a special grant for doing so. However, the problem is that the Government grant is guaranteed for this year alone. Any local authority that agrees to a grant now may well have to pay up in the next financial year. In that case, the Government subvention may not continue, and the local authority's own expenditure may lead to it to being fined for overspending.
Again, under what it calls its "Care in the Community" initiative, the DHSS—;with which the Secretary of State once had something to do—;is urging local authorities to take part in joint schemes for moving elderly people out of hospital into the community. National Health Service money helps to set up those schemes, which are very worthy. However, local authorities under those schemes eventually take over the running costs. Those running costs mount, yet they count against the council's spending ceilings. The Government refuse to exclude those costs from penalty.
Therefore, if local authorities do what the Government urge them to do, they will be failing to do what the Government urge them to do. Russian roulette becomes "Catch 22". Inevitably, in such intolerable circumstances, services are declining. No wonder there was so much gloom in the report by Her Majesty's inspectors, "Effects of Local Authority Expenditure Policies on the Education Service in England— 1982." That document was published only last week. I shall quote just a couple of passages from the lamentable documentation of the effects of the Government's spending cuts.
Paragraph 29 states:
It has to be noted that there was clear evidence that (except, perhaps, in London) primary schools were frequently dependent upon parental contributions, not only for 'extras' but to buy books and basic materials.
Paragraph 37 states:
Overall provision of books in secondary schools was judged to be satisfactory in only two-fifths of LEAs. Library provision was often found inadequate to support the pupils' levels of learning, particularly those of the less academic, and, although in two-thirds of the work observed textbooks were in satisfactory supply, there were still too many cases where pupils did not have


enough textbooks in subjects such as English, modern languages and, especially, science. The pupils' capacity to work on their own was therefore reduced.
Yet many of those cuts are pointless and unnecessary because they are caused by the non-payment of grant which was wrongly withheld. If those are strong words, it is the evidence of the Government that confirms them. That evidence is contained in the 1981–82 report before us today; a report over which the Secretary of State slid in a sentence or two. However, it is a most significant report in the light of the 1983–84 report. The contradictions in the Government's policies become a chasm of futility when those two reports are compared. On the one hand, the 1981–82 report carries further the Government's policy of close-ending grant—;that is, reducing grant allocation because of grant overclaim by local authorities. On the other hand, the 1983–84 report deals with the very opposite problem—;the failure of local authorities, because of the incomprehensibility of the system, to claim all the grant to which they are entitled. Thus, they are getting some more which they did not ask for, because they did not claim enough, because they did not know how to claim enough.
Then again, as the Secretary of State has told the House, the 1983–84 report withholds £280 million in grant from local authorities that are accused of overspending for the current financial year. On the other hand, the 1981–82 report refunds £77 million grant to local authorities that were wrongfully fined for overspending in that year. Last December, the House approved a supplementary report. In it, 104 local authorities, simply on the basis of their published budgets, were savagely fines for overspending in precisely the way that this report is fining 153 authorities for overspending. But now that the actual spending returns of those 104 local authorities are in, it turns out that nearly half of them did not overspend at all, although they were fined. Most of the others did not overspend by as much as the Government believed they would. In this report, of the 104 penalised authorities, 43 will get back every penny of their fine, and another 12 will be refunded more than half their fines. In all 81 of the 104 will get back some of the grant which was taken away from them by the House last year on the recommendation of the previous Secretary of State.
The total penalty has been cut by more than one third, from £201 million to £121 million, because what the Government alleged last year to be an overspend of £544·1 million turns out, on the Government's criteria, to be only £224·7 million. That was last year's whopping error. What will this year's error be? The Secretary of State talked about a £700 million overspend, but he does not know. On the precedent, it will be much less than that. The Secretary of State made a 142 per cent. over-estimate and shrugged it off as being all in a day's work, yet if local authorities are one or two percentage points out he slices them up on the bed of Procrustes. The right hon. Gentleman said that local authorities know how to calculate, which is true. The problem is that the Secretary of State does not know how to calculate. He calculates 242 per cent. when he means 100 per cent.
Hon. Members will remember the debate after which the fines were imposed. We remember the present Secretary of State for Defence parading the scapegoats during that debate. We were told how wicked south Yorkshire was, but today hon. Members will vote to give back to south Yorkshire £329,000 of its fine. The evil west

midlands will get back £1,709,000. Next came that notorious wrongdoer, west Yorkshire, whose refund is £372,000. Hounslow receives a refund of £147,000, and Lewisham receives £327,000. The previous Secretary of State rounded off his list of culprits with the arch-criminal, the dreaded Dr. Moriarty of local authorities—;Lambeth council. Last year the Secretary of State docked Lambeth £3,687,000 for its alleged profligacy. He is now refunding to Lambeth every penny of that £3,687,000, and the same hon. Members who voted to take it away will dutifully march through the Division Lobby to give it back and will say that they were right both times.

Mr. Patrick Jenkins: I admire the right hon. Gentleman's homework, but he is making extremely heavy weather of the simple fact that when councils saw what was proposed for their rate support grant they decided to change their budgets. They spent less, so the amount of holdback penalty that they suffered was correspondingly less. I should have thought that the right hon. Gentleman would have applauded a Government who were prepared to recognise that and to reduce the holdback.

Mr. Kaufman: That was a daft intervention, as I shall demonstrate clearly in a moment. When the House voted to fine those local authorities on their budgets the authorities had already completed their spending. I warned the Government at the time what would happen, and named authorities which the Government were pointlessly penalising when it was already known that they had underspent, although their earlier budgets were above the expenditure ceilings. During that debate I mentioned Knowsley, which is a problem-ridden authority on Merseyside. The right hon. Gentleman took £1,577,000 from Knowsley last year. Today he is giving it back the entire £1,577,000, but not because Knowsley suddenly changed its ways after it heard that it was going to be fined. When the Government asked the House last December to take that money from Knowsley, I told the House that they would have to give it back at some future date, thus causing the authority enormous inconvenience in its cash flow in the meantime.
However, the Secretary of State has learned nothing from that episode, because today, as well as being asked in this report to return that money to Knowsley, we are being asked to start the nonsensical cycle all over again by taking a further £513,000 from Knowsley. If the Back-Bench sheep in the Conservative party do as they are told, no doubt in a year's time they will equally obediently vote to provide the required refund. No wonder some Tory local authorities are so sickened by the Government's antics that they simply get on with providing the services that they believe are appropriate, regardless of the Department's ceilings and penalties.
Tonight Conservative Members, including Devon's full complement of Tory Members, will vote to take £1,941,000 from that county. The action of the Government, and of the county's Tory Members, has been dismissed with contempt by Mr. Keith Taylor, the vice-chairman of Devon's finance and performance review committee. He says:
The cut has been taken into account and it will make no difference to the planned expenditure of our published budget … We planned it with our eyes open … Broadly, we said that if we did not spend the extra money, then the effect on services would be more severe than we reckoned was palatable." That is what Tory Devon says about the spending ceiling that the Secretary of State describes as realistic.


At about 7 o'clock this evening Warwickshire's Tory Members will vote to fine Warwickshire county council £562,000 for overspending. Today the Association of County Councils local government finance committee has on its agenda a submission to the Secretary of State entitled "Warwickshire's case against spending targets". The Tory-controlled council states:
The only way the County Council could hope to meet Government spending targets would be through drastic cuts in services … Warwickshire would have to reduce teacher numbers much faster than falling rolls; it would have to cut the amount spent per pupil on supplies and equipment rather than increase it; it would have to reduce personal social services and not be able to improve them; and it would have to think in terms of a smaller police force and not a larger one.
The cost of not doing this would be rate rises of between 30 per cent. and 40 per cent., almost wholly to pay the Government's grant penalties. Without that punitive action, Warwickshire would be able to maintain the standard of its services to the public, and still levy rate increases no higher than the general rate of inflation.
All Kent's Tory Members will no doubt walk through the Lobby this evening to take away £3,012,000 from that county. They will anger, but not perturb, Mr. Robert Neame, the chairman of the county council, who says:
We were well aware of the penalty provisions when we fixed our precept for the current year … However there is always the necessity to balance the needs of services against the precept increase and when the County Council struck that balance last February we were aware that we were exceeding by 1.9 per cent. the Government's spending target … Although the budget figure exceeds the spending target it is well below the Government's assessment of what the County Council needs to spend to provide an average level of services … We regret that Kent will be penalised but our first duty is to ensure the provision of essential services at a cost acceptable to the ratepayers.
Those are the words of responsible local government.
However, local government also has its quislings and collaborators. One of them is a gentleman named Mr. David Tweedie, a Tory councillor from Hammersmith and Fulham, who earlier this month wrote this toadying letter to The Times:
At a time of financial stringency it is more than ever necessary for central government to curb the extravagance of local authorities if local electors are unable to do so.

Mr. Eldon Griffiths: Hear, hear.

Mr. Kaufman: The hon. Member for Bury St. Edmunds (Mr. Griffiths) is very loyal to Mr. Tweedie. Mr. Tweedie goes on:
Here in Hammersmith and Fulham … our estimates for 1983–84, recently circulated by the Director of Finance, include such items as provision for the expenditure of no less than £670,000 on 'children's play', of which £512,000 is made up as revenue estimates for the salaries and wages of those involved in the play arrangements.
Surely it must be a good idea for local authorities to cut back in such areas, which are really not essential, if by so doing inflation is curbed and the currency stays sound.
I wonder what the prudent and frugal councillor Tweedie would say about one council which, the week before last, laid on a special works session at a luxury hotel for 35 of its councillors and officials. They started off with a snack lunch. Their talks were later adjourned for afternoon tea. More talks, and then a buffet dinner from which they could choose seafood salad or cider fruit cocktail, followed by roulade of ham, terrine du chef and a choice of four other main dishes, each served with a choice of asparagus tips, devilled bito and goujons of sole tartare. They finished off with sherry trifle and coffee, and

the meal was accompanied by various wines costing £63 a case. No doubt those refreshments assisted them in their deliberations, the subject of which was
what services would have to be axed or reduced, in order to accommodate the government's latest round of cash cuts to local authorities.
The local authority concerned was councillor Tweedie's Tory-Liberal-controlled Hammersmith and Fulham, although, sadly, councillor Tweedie was not important enough to be invited—;just a trifle, no sherry.
The chairman of Hammersmith and Fulham's housing committee described this day, spent at the Cunard international hotel, as "a very useful exercise", and the council has found some aspects of expenditure to cut. For example, it has just started charging £5 a week for the home help service to people receiving attendance allowance, such as people like Queenie Calcott, who is paralysed in a wheelchair following a brain haemorrhage. The cost of the councillors' outing at the Cunard international hotel would pay her home help bill for two years.
That is what the debate is all about. It is not about financial control. Local authorities control their expenditure more efficiently than the Government do. It is not about overspending— none of these authorities has overspent a penny. It is about humanity, service and local democracy. The Government have spent four years trampling local democracy underfoot. They have now acquired a new supply of Lobby fodder that will tonight obediently vote, first, to put right last year's injustice and then to inflict this year's injustice. I call on my right hon. and hon. Friends to register their protest and their disgust in the Division Lobby.

Sir Anthony Grant: We always enjoy the contributions of the right hon. Member for Manchester, Gorton (Mr. Kaufman), even when he quotes rather unhappily from Jean-Paul Sartre or, even more unfairly, gives examples. We could all do the latter. I could give examples at great length of the Greater London council, and the absurd antics upon which it spends money, which makes the example of Hammersmith and Fulham seem like a mildly puritanical tea party. I have some sympathy with the right hon. Gentleman's criticisms, but his strictures would carry more conviction if he had not been a member of a Government who failed to grapple with any of these problems and if he were not a member of a party that is notoriously the biggest and most irresponsible spender of public money that the country has ever known.
I do not wish to follow the right hon. Gentleman into particular points as this is, for me, a maiden speech, after a fashion. It is the first that I make as the hon. Member for Cambridgeshire, South-West. I do not ask the indulgence of the House in making my second maiden speech because there has been a lapse of 18 years since I first spoke in the House as the hon. Member for Harrow, Central. Making a second maiden is rather like the experience of Uncle Peregrine, the confirmed batchelor in Evelyn Waugh's novel, "Unconditional Surrender". He was asked whether he had ever been to bed with a woman, and said rather smugly, "Only twice"—;once when he was 20 and once when he was 45. When he was asked to tell his questioner about it, he said that it was the same woman.
The relevance of that observation is that, although my present and previous constituencies are different in many ways, they also have much in common. I am honoured and proud to represent a constituency that has agriculture as fine as that of anywhere else in Europe, and as many thriving small firms dealing in modern sophisticated goods and services as anywhere in this country.
It is agreeable that my new constituency is formed out of the constituencies of my right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym) and my hon. Friends the Members for Huntingdon (Mr. Major) and for Cambridge (Mr. Rhodes James), all of whom are personal as well as hon. Friends and all of whom are Members whom I greatly admire. It is people rather than geography who make a constituency and, therefore, I find something else in common with my previous constituency, which leads me back to the subject of the debate.
Cambridgeshire has been badly treated by the rate support proposals. It is the same old story of putting councils that have been prudent and cost-conscious in the past on the same level as the spendthrift authorities. It was the same last year and the year before that in Harrow, where the authority suffered because it cut expenditure in the year on which the rate support grant was based, while loony London councils frittered away money like water on the party political nonsense about which we all know too well. There were tributes to Karl Marx festooning their boroughs and idiotic trips abroad on all sorts of strange causes. Yet they were dealt with on the same basis as responsible councils such as Harrow and Cambridgeshire, with which I now have the honour to be concerned.
I agree with my right hon. Friend the Secretary of State for the Environment that the irresponsible councils should be hammered, and hammered hard. That was the policy that we put before the electorate, and it is what the electorate expect us to do. Cambridgeshire has heeded the siren voices of Treasury Ministers of both parties and the voices of the IMF. The county council has cut staff, it has cut out bureaucracy, reduced the number of chief officers from 13 to nine and, I am particularly pleased to say, has privatised some of its services, much to the benefit of ratepayers. Only recently, it made a decision, which I support, to go out to contract for the cleaning of schools in the area, and that will save the hard-pressed ratepayers vast sums of money. I hope and believe that the council will proceed further along this road, following this fundamental feature of the Government's policy.
The actions of the Cambridgeshire county council have been wholly in accordance with Government thinking and philosophy, all of which was put before the electorate and endorsed at successive elections. However peculiar, strange animals breed inside the Department of the Environment, called "GRE" and "Regression analysis", which sound rather like the ugly sisters, and with whom hon. Members will be familiar. These animals have weird effects. Cambridgeshire, despite its financial responsibility and prudence, is to be penalised to the tune of £1·5 million in 1983–84. This is because the rate support grant is based upon historic rather than current data. It is especially ironic, as I understand it, that the base in this case is 1978–79, when Cambridgeshire was responding to the clamour of the then Labour Government, no doubt with the IMF breathing down their neck, to curb local government expenditure.
The test of eligibility for the rate support grant should be based on people's needs. I remind my right hon. Friend

the Secretary of State for the Environment that in recent years East Anglia has had the fastest growing population in England and that Cambridgeshire has been the fastest growing part of East Anglia. My hon. Friend the Member for Huntingdon (Mr. Major), who sits in silence on the Government Front Bench., will appreciate that the town of St. Neots, which I inherited from him, has been the fastest growing town in that area. The Secretary of State for the Environment had an opportunity to see the position when he went to St. Neots during the election campaign.
If Cambridgeshire is penalised or even put on the same footing as the more irresponsible authorities, that would provide vivid illustration of the fact that something is fundamentally wrong with the system. We all look forward eagerly to my right hon. Friend's White Paper on rate reform. It is a subject in which I have taken some interest and on which I spoke during the last Parliament. If we imposed a poll tax equivalent to the cost of a television licence and shifted teachers' salaries to the Exchequer, the rate support grant could be reduced and be far less significant. Local authorities would be more independent. During this short debate I cannot go into the whole subject of rate reform, but I give my right hon. Friend a sign of what I hope will be in his White Paper. Until the rate support grant is reduced, I ask my right hon. Friend to ensure that local authorities' good housekeeping is rewarded, not punished, and to bear Cambridgeshire in mind in this connection.
I support wholeheartedly the Government's policy to abolish the idiotic organisation called the GLC. I hope that the substantial savings that might accrue will benefit the more responsible authorities, such as Cambridgeshire.
I have great admiration for my right hon. Friend the Secretary of State for the Environment and I wish him well in his new job. He is a man of great experience. He entered the House on the same day as I did. We were pleased to see him when he visited the constituency during the election campaign. He has experience as Chief Secretary to the Treasury. I hoped that he might have been appointed Chancellor of the Exchequer, but he has a responsible post. I rely on him to cut through the jungle of officialdom in the Department of the Environment, which has served us ill when allocating the rate support grant, and which, unless something is done, will do so again in future.
One of my right hon. Friend's predecessors, in a Labour Government, said "The party is over." It certainly is. My right hon. Friend should visit his wrath on the drunks still lying on the floor after the party and not on those diligent people who have already started to tidy up the mess.

Mr. Jeremy Corbyn: During this debate we see the continuation of the argument that the Government have put forward during the past four years— that high rates are the responsibility of profligate local authorities. The reality is that the Government have spent the past four years penalising local authorities, taking money away from them, making their job harder, leaving them with the problems created by the Government's economic policies, forcing them to put up rates to maintain services, and then running a local propaganda campaign against Labour-controlled authorities for increasing the rates. Today we see a continuation of the Government's attack on local government. The amount cut from local authority support


in London is astronomical. During those four years Islington lost between £25 million and £30 million and the problems facing the people of that borough multiplied.
We also see an attack on the constitutional position of local government. The Government continually say that local authorities are wasteful and spend too much money on services. Yet at the same time they claim that local authorities are independent and have freedom of action. Clearly they have not.
I was elected to the local authority in Haringey, first, in 1974 and then in 1978. The Labour party put forward a manifesto in the 1978 election based on the law then pertaining and upon the finance likely to be available from central Government under the rate support grant system. The manifesto was accepted and supported by the people, and the council was duly elected. Because central Government changed the rules over the following four years, the democracy that elects councillors is regarded as cheaper and second-rate compared with the democracy that elects Members to this House. The Government are saying that they hold in contempt those who have been elected in local government elections. The Government imagine that they can ride roughshod over the attempts of local authority members to provide services for the people whom they represent.
As my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) said, the reality is that the services that can be provided and the decisions that local authorities can make are controlled by central Government.
My experience of local authorities' rate-making decisions is not as described by the Government. All boroughs face horrendous problems—;multiple homelessness; people being forced into bed and breakfast accommodation because the local authority cannot provide decent housing; waiting lists for home helps; nursery provision; legitimate demands for support for more nurseries; support for a multi-ethnic community; and support for the unemployed. Most of those problems have been created by central Government.
In contrast, central Government lecture local government about not spending too much money on such people. That is the most disgraceful aspect. Ultimately, the decisions made in this place on the policies put forward by the Government mean that old people, who after a lifetime's work are perhaps confined to their homes and in desperate need of home helps, are charged for or, even worse, denied home help. Disabled people are denied the grants and assistance that they should have.
One can see the difference between the attitude taken by inner London predominantly Labour-controlled authorities that do their best to provide services for those people who are worst off and that taken by outer London boroughs that do the opposite and try to toe the Government's line by cutting services at their behest.
The north Tottenham-north Wood Green area is on the border between the boroughs of Haringey and Enfield. The borough of Enfield has been Conservative-controlled since 1968. People leave the borough of Enfield daily to go to Haringey because they know that they can obtain a cheap lunch at an old people's luncheon club there. Such lunches are not provided by the Tory-controlled borough of Enfield. A similar story is repeated all over the country.

Mean Tory-controlled local authorities do not provide the services that the elderly deserve. I am sure that many of my hon. Friends could recount similar experiences.
The principle of central Government control of local government is put forward continually. We are repeatedly lectured that local government is wasteful and tries to provide unrealistic, expensive services.
I ask the House to consider the way in which local authorities' housing policies are treated by central Government. I wish that the homeless could organise themselves, turn up at this place and tell Members what it is like to live in bed and breakfast accommodation and to queue at housing action centres week after week knowing that, because of cuts in the amount available for building from central Government and in the rate support grant, no house will be available.
If a local authority wishes to provide housing for its homeless people, central Government will decide the cost and design of the properties that borough and district councils propose to build. Central Government reject those plans if they think that they are too expensive. There is then an endless toing and froing for months and months until some agreement is reached. As a result, the local authority is allowed to build the houses that it wants, usually of an inferior standard, with smaller rooms, smaller windows that are not double glazed, less insulation and smaller gardens. As central Government's attititude to a borough's building policy is so mean, social problems begin to increase. People are put into houses that are too small for them, and they pay more through vast heating bills, because of inadequate insulation.
If we are to have genuine democracy, we must give local government freedom of action to respond to, and meet, the needs of its local community rather than have it dictated to by a bunch of bureaucrats in Whitehall, whose spokesperson on the Government Bench cannot even be bothered to stay to listen to the debate.
The other great lie that is continually peddled about local authorities is that somehow they can be made more efficient by privatising the services. If Conservative Members had any knowledge whatever of the way in which local government is run, or if they talked to those who try to administer it, they would not preach the gospel of privatisation. If the House rises early enough tonight, I invite Conservative Members to take a bus to Wandsworth, to knock on the doors of any 20 houses and to ask the people what they think of the refuse collection service in that borough. If there is more time, they should go to Southend and ask the people there what they think about their refuse collection service. If those people complain about the service, they are referred to the private contractor who says, "It has nothing to do with me." He rejects the complaint, because he is much too busy making money.
The reality of the privatisation of local government services is not that the ratepayer gets a more efficient service or that the public purse is better off, but that jobs are cut, people are made redundant, and there is less control over the way the services are delivered.
Westminster city council recently decided that it would be cheaper if it privatised the cleaning of its town halls. Women workers who have given years of service, doing what in many cases was unpleasant work late at night or early in the morning, were told that they were surplus to requirements and that a private cleaning company would be brought in.— [HON. MEMBERS: "Quite right, too."]


Conservative Members should get in touch with their friends on Westminster city council and ask why they could not even be bothered to meet the 25 women, some of whom have given 30 years' service and more, who were dismissed via a duplicated letter. That is the attitude of many councils to privatisation.
The Westminster city council claimed that by sacking a large number of town hall cleaners the ratepayers would be better off. Those people, instead of doing a useful job, were made redundant and forced to go through the indignity of queueing up week in, week out, for a measly pittance handed out by the state—;a charge on central Government funds. Therefore, unemployment was deliberately created and the profits handed over to a private enterprise cleaning firm. That story is repeated throughout local government.
When the Government preach the gospel of privatisation, in reality they are preaching an end to democratic control of local government and the handing over of vast profits to private cleaning companies that are accountable to no one. By doing so, they force workers, who had previously fought for and obtained satisfactory conditions, to accept worse conditions because the alternative is the horror of the dole queue. That is part of the attack on local government trade unionism and is an attempt by the Government to depress the living standards and wages of people employed in the public sector.
If a survey were taken of those in local government who must provide the street sweeping, refuse collection, gardening and other services, they would say that we were mad to dismantle a satisfactory system of democratic control and instead to bring in a private enterprise firm that was accountable to no one. Such a policy merely allows large profits to be made out of local government.
The Government have waged this insidious war of attrition on local government for the past four years. Instead of taking account of need and asking local authorities, "What are the needs and problems of the people whom you represent?", they are saying "We know better. We shall decide how much to spend, and halfway through the year we might decide to cut the amount of money available." As a result, the local authority is placed in a terrible position. It may be forced to sack workers or to reduce services halfway through the year. That removes a basic form of local democracy.
These reports are yet another nail in the coffin of local government, as is the attack against the metropolitan authorities and the GLC. We should be talking about genuine local democracy so that from one year to another local authorities have some idea of how much money they will get instead of taking away this right to control and provide local services and imposing on them a series of quangos.
The Minister's predecessor was supposed to be hunting the quangos. Instead, the Government seem to be trying to destroy the metropolitan authorities and the GLC by imposing self-appointed bodies—;presumably with the approval of Conservative Members—;that will administer local government and take away the democratic control that has been fought for over many years.
Even some Conservative Members must now feel that their authorities have on occasions been treated badly by central Government. I hope that they and my hon. Friends will look on these reports as the start of a major constitutional shift by destroying local democracy and handing greater power to central Government. By the end

of this Parliament, if it runs its full term— which I sincerely hope it will not— we shall have not local government but a Minister supposedly responsible for local government. In the same way as the French education Minister used to decide local education policy, he will decide every iota of local authority expenditure.
Conservative Members may paddle a populist canoe for a while and argue that rate increases are the fault of local authorities for trying to provide services, but, come the cuts, people will begin to realise the truth. They will see through the lies that they have been told and will turn rapidly against the Government.

Mr. Ken Hargreaves: I thank you, Mr. Speaker, for calling me to make my maiden speech. Maiden speeches can be something of an ordeal, for deliverer and listener alike. My own nervousness was hardly helped when one of my well-meaning constituents sent me a newspaper cutting quoting a former Member, not known for his reticence, as saying that he was almost unconscious with nerves when first called by Mr. Speaker.
I represent the new constituency of Hyndburn, which came into being through boundary changes. In effect, it is the former constituency of Accrington, to which has been added the township of Great Harwood and the village of Altham, previously part of the Clitheroe constituency.
I should first like to pay a geniune and sincere tribute to my friend, opponent and predecessor, Arthur Davidson, who represented Accrington. He was a Member cif the House for 17 years and those who served with him will agree that he had the respect of all parts of the House. He was a hard-working and conscientious Member and very popular with his constituents, many of whom have cause to be grateful to him for intervening successfully on their behalf when they had a problem. He served us well.
When my constituency's election result was eventually declared, having been the last in the country, I said that although I was delighted to be the first Conservative for 40 years to represent Accrington, I would rather have beaten anyone than Arthur Davidson. It was particularly hard for him to be beaten so narrowly after so many recounts. I had hoped that the Dissolution Honours List would have included his name, so that victor and vanquished could have been together at Westminster. However, it was not to be, and I wish him well in whatever he intends to do. I thank him for the service that he gave the people of Accrington.
The other part of my new constituency was represented by my hon. and learned Friend the Member for Ribble Valley (Mr. Waddington), now Minister of State, Home Office. If I discharge my duties to his former constituents as well as he did I shall not go far wrong. I am most grateful to him for his kindness to me in recent weeks.
To be elected to the House is always a great honour. To be elected by the people among whom one has lived all one's life and who consequently know one's faults and failings is an even greater honour, but one which makes one feel humble and anxious to justify the confidence shown in one. As my hon. Friend the Member for Bury, North (Mr. Burt) said in his maiden speech,
It is a fortunate man who can represent his home town."—[Official Report, 19 July 1983; Vol. 46, c. 244.]
Hyndburn is as typical a Lancashire industrial constituency as any to be found. Its history bears witness to the creative skills of Lancashire. The spinning jenny,


which revolutionised the textile industry, was invented in my home town of Oswaldtwistle by James Hargreaves in 1764. I share his name, but not his blood— nor, I regret, his inventive genius. I understand that he died a pauper. After last week's debate, that may be the only thing that I shall eventually have in common with him.
We must never forget that this country prospered through the skills and hard work of the people in the textile industry and other industries. There is more than a little truth in the old slogan that Britain's bread hangs by Lancashire's thread. When those skills brought a further revolution in the cotton industry, Hyndburn and the surrounding areas were rewarded with more than their fair share of unemployment.
Hyndburn covers an area of 28 square miles and with a population of 79,000 it is the most densely populated area in north-east Lancashire. However, we have good provision of public parks and open spaces. The constituency is overlooked by the Pennines to the south and east and is on the edge of the forest of Bowland to the north. Among our most recent claims to fame is that the Accrington art gallery has one of the world's finest collections of Tiffany glass.
The Hyndburn work force is 37,000 and is renowned for its craftmanship, loyalty and excellent industrial relations, but it has been badly hit by unemployment, which is currently running at more than 15 per cent. Although we no longer depend so heavily on cotton because we have diversified, manufacturing industry still dominates the working life of the area and goods ranging from greetings cards to billiard tables and aerospace components are produced.
Hyndburn has severe problems—;many not of its own making— of high unemployment, large areas of dereliction, poor housing and hospital and rail services under threat. Given the opportunity, its people work hard for low wages. We are proud and independent people who would far rather give help than receive it, but we desperately need help now.
I supported the Government's decision in 1979 to withdraw assisted area status because our unemployment rate was just over 4 per cent. and it seemed sensible that if Government aid was to be given at all it should be concentrated on the areas of greatest need. Unemployment in my constituency is now more than 15 per cent., so it has become such an area. Not only has our submission for assisted area status been rejected, although neighbouring Rossendale has been granted development area status, but our application for designation under the provisions of the Inner Urban Areas Act 1978 has also been turned down. Neighbouring Blackburn has been upgraded from a designated district to a programme authority while Burnley has become a designated district. My constituency is therefore surrounded on all sides by local authorities which have been identified as areas of need and to which some form of Government aid has been given. That has increased and accentuated the economic decline of Hyndburn.
The borough council, of which I am a member, has always tried to keep its expenditure under control and was reducing spending of its own volition before cuts were imposed by central Government as we believe it to be in our ratepayers' interests to do so, not least because people on low wages cannot afford high rates. When central

Government subsequently asked for cuts, we made those as well, only to be penalised further because other authorities overspent. We were therefore pleased when the Conservative Government departed from the old and foolish system whereby the more a local authority spent the more grant it received, at the expense of more prudent authorities.
The grant-related expenditure assessment seeks to establish an absolute level or yardstick by which comparisons can be made. I realise the enormous difficulties in the GREA exercise and in ensuring that the indicators, used accurately, reflect the costs and needs of each authority. I argue, however, that the GRE indicators heavily under-represent the needs of my constituency. The E7 and C19 housing indicators are of particular concern. If a local authority's expenditure is considerably above the GRE level, that implies that the authority is a relatively high spending authority or that the GRE formula does not accurately reflect the needs of that authority.
The selection and weighting of indicators in the GRE system for shire districts has been heavily influenced by regression analysis of past expenditure by local authorities. Therefore, there is a danger that authorities with needs which are untypical of previously high-spending authorities may have their needs underrepresented. I submit that the needs of Hyndburn and other urbanised north-east Lancashire authorities are not adequately reflected in GREAs. That is the main reason why five such authorities have expenditure guidances more than 15 per cent. above their GREAs.
I was therefore particularly pleased when my right hon. Friend the Secretary of State said that there was an element of rough justice in GRE. I agree with him, and my constituents are feeling the effects. Unemployment rates have only marginal importance in determining GRE, but high unemployment leads to significantly increased local government expenditure requirements.
The transport GRE fails to take account of the different needs of transport spending authorities within a county and whether the authority runs its own bus services. Because Hyndburn previously had one of the few profitable bus undertakings— it now makes a loss— its spending relevant to its GRE and its expenditure target has been seriously affected.
The system of GRE is an improvement on previous methods, but it is far from perfect. The failings of the system cause severe problems for many authorities. As my local authority is worried about the effects of high rates on its ratepayers, the present rate support grant system means that many of its traditional activities have been severely constrained and new initiatives with revenue implications have been virtually stopped. It is particularly ironic that the GRE system should discriminate against Hyndburn, as 80 per cent. of the houses are owner-occupied and especially as the GRE system never stopped Hyndburn aiding needy owner-occupiers.
I am grateful to the Government for following policies which have reduced inflation and interest rates, which play a significant part in the level of rates. I believe that the Government have a right and a responsibility to determine the overall level of public expenditure. I regret that what my right hon. Friend the Prime Minister referred to as the customs and conventions which govern the relationship between local and central Government have broken down. That, more than anything else, has caused my local authority's present difficulties.
I am glad to see from the report that the Secretary of State has considered the representations made by local authorities under section 8(4) of the Local Government Finance Act. I hope that he will seriously consider reviewing the GRE indicators so that authorities which set out deliberately to ignore the Government's policies are penalised and councils which genuinely seek to co-operate and are proved to have been reasonable will not suffer financially or from the humiliation of being classed with the Greater London Council as overspenders.
It comes as a shock to a council which in the years since reorganisation invariably had rates increases below the average suddenly to find itself classed as an overspender. Any system which requires a council to provide rock and roll on the rates, as we read in yesterday's newspapers, while another council is desperately trying to maintain essential services clearly needs to be examined and improved.

Royal Assent

Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. Appropriation (No. 2) Act 1983.
2. Finance (No. 2) Act 1983.
3. Companies Beneficial Interests) Act 1983.
4. International Monetary Arrangements Act 1983.
5. Local Authorities (Expenditure Powers) Act 1983.
6. Car Tax Act 1983.
7. Medical Act 1983.
8. Value Added Tax Act 1983.
9. Ashridge (Bonar Law Memorial) Trust Act 1983.
10. Associated British Ports Act 1983.
11. Commons Registration (Glamorgan) Act 1983.
12. Tor Bay Harbour (Torquay Marina &amp;c) Act 1983.
13. London Transport (Liverpool Street) Act 1983.
14. King's College London Act 1983.

Rate Support Grant (England)

Question again proposed,

Mr. John Cartwright: It is a pleasure to congratulate the hon. Member for Hyndburn (Mr. Hargreaves) on his maiden speech. He frankly admitted to some nervousness when he began, and I admire his courage in choosing to make a maiden speech on something as mind-bogglingly complex as the rate support grant supplementary reports. I strongly agree with his outline of the analysis of some the failings of the grant-related expenditure assessment system.
The House was glad to hear the hon. Gentleman's generous tribute to his predecessors, especially Mr. Arthur Davidson, who was very much liked in all parts of the House. I hope that the hon. Gentleman feels a little more relaxed now that he has the ordeal of his maiden speech out of the way. We all look forward to hearing from him again, especially if he continues to be as critical of the rough justice of the rate support grant system as he was in his maiden speech.
I intend to be brief. As the right hon. Member for Manchester, Gorton (Mr. Kaufman) reminded us, we have been around this course a great many times during the past few years. The Secretary of State reminded us that, although the saga of Government attempting to control local authority spending is long, it has gathered pace since 1979.
When the Government began the whole operation with the Local Government, Planning and Land Act 1980, hon. Members in various parts of the House told Ministers that if they pursued that approach they would inevitably be sucked into further and further detailed interference in the spending decisions of individual local authorities. That has proved to be the case. Each piece of legislation and each change in the rate support grant allocation system has led inexorably to more legislation, to more changes and to more interference.
That was made absolutely clear when the Government set their hand to the current grant penalty arrangements. We warned that the system would mean higher rate poundages for ratepayers— not only because the determined high spenders would be certain to show two fingers to the Government and raise their rates to maintain their high levels of spending, but because a number of Conservative authorities, concerned about the level of services, would raise their rates to protect those services rather than cut them back.
As the Secretary of State made clear this afternoon, the system of grant penalties is leading to rate capping. That means that Government will fix the rate levels for individual local authorities. They will decide what is a proper level of service for an individual authority. When we reach that stage we shall have ended the traditional relationship between central and local government. Central Government will then be very much involved in the individual running of local authorities. That is not only wrong but muddle-headed.
The Secretary of State concentrated on the wicked high spenders beloved of Tory Ministers. But 160 of the 413 authorities have exceeded what is euphemistically called the Government's expenditure guidance. Surely that does not imply that all the 160 authorities are manned by determined, wild, reckless overspenders and wild-eyed


revolutionaries. It shows that the whole complex business of target-setting is a far from accurate process. I have never believed that it could work.
However complicated we make the mathematical formula, to however many decimal places we take the multiplier, there is no way in which officials at the Department of the Environment in Marsham street can know what it is right to spend in individual local authorities from Land's End to John O'Groats. That is a matter for local decision-making and local judgment. The idea that Government know best is alien to the usual relationship between central and local government. We are wrong to try to make the machinery ever more complicated and ever more burdensome on local government.
I object to the whole business in principle, but I object on practical grounds also. Government interference confuses responsibility and accountability. No longer are electors and ratepayers able to say to individual councillors "You are responsible for that spending decision". Councillors can now say that it is nothing to do with them because the wicked Government have cut the grant and so they have had to raise the rates. There is no longer a clear responsibility for spending decisions. That is wrong. Councillors should be clearly accountable for spending decisions.
I do not defend the spending priorities of some local authorities. They have made a difficult position 10 times worse with the spending priorities that they have set themselves. I am sure that the hon. Member for Eltham (Mr. Bottomley) will support me if I quote some examples from my local authority, the London borough of Greenwich. It has made a difficult position a great deal worse by deciding to spend money on a police adviser at £13,800 a year, a women's adviser at £13,800 a year, on the whole ramification of a human affairs committee and on the publication of a newspaper staffed by people moonlighting from Tribune. The council says that it needs to employ a substantial number of additional staff, which will mean additional office accommodation and additional car parking. That is on top of a 29·8 per cent. rise in the rates.
One of the most interesting examples of local authority spending priorities was a recent advertisement in the national press by the London borough of Camden for a nuclear-free zone co-ordinator, with a salary of more than £13,000 a year. I do not know what a nuclear-free zone co-ordinator in the London borough of Camden will do. That is an odd sense of priorities at a time of major cuts in social provision in a great many of our London boroughs.
I do not defend local authority spending decisions which, in many cases, are ridiculous. However, those are matters between the elected councillors and the electors. At the end of the day if we can ensure that local councillors are more directly responsible for their actions, the ratepayers and the electors will sort out the errors made by councillors.
It is not right to think of the Government as a great policeman, to whom ratepayers turn every time their local council makes a crazy decision. The Secretary of State argued earlier that ratepayers turned to the House and to their Members of Parliament when they disagreed with a decision. No doubt they turn to us, but we are wrong to try to sort out those problems from above. If we believe

in local accountability and the principle of local councillors being elected by and responsible to local people, the issues should be left to the elections.
I would prefer to deal with the problems in Greenwich by turning out the villains at the next election rather than by asking the Government to breathe down the necks of local councillors.
Some of the worst examples of overspending occur in the authorities that are safely elected for four-year terms and do not have to face annual elections with one third of their members retiring. Perhaps if more local authorities had annual elections their minds would be concentrated wonderfully.
Local authorities should have a more direct relationship between spending decisions and revenue raising. One of the problems is that only one fifth of local government income comes from the only genuine local tax—the rates. The other four fifths of local authority income comes from the non-domestic rate, which is not a genuine local tax, and from rate support grant. One of the strongest arguments for a local income tax is that it strengthens the relationship between those who spend the money and those who provide it. I believe that to be right.
We shall vote against the reports because they undermine the basis of local government, because they are a further step on the road to total central control of local authorities, and because they make local government accountable upwards to civil servants in Marsham street. The future of local authorities lies in them being made accountable to the people whom they were elected to serve.

7 pm

Mrs. Angela Rumbold: I congratulate my hon. Friend the Member for Hyndburn (Mr. Hargreaves) on his maiden speech. I recall the first occasion that I made a speech in the House. One of my hon. Friends observed that it was more difficult for a girl to make a maiden speech because hon. Members could see her knees knocking whereas a man's trousers disguised that. I have much sympathy for my hon. Friend. He made an admirable first contribution.
I joined the picturesque world of local government in 1974. There was one year of blissful spending before the then Labour Government decided in 1975 that the party was over and that expenditure would have to be curtailed in some shape or form. I am probably the first hon. Member to speak today who made the rate for four successive years. Those were the years when we experienced the transition from the regression analysis formula for rate support grant allocation to the introduction of the block grant, rather than expenditure assessment. They were traumatic years. I can speak with feeling about the difficulties that faced local government in trying to assess their priorities, not merely for the year ahead, but for the following years. It was important to get the sums right in the first year so that one could be sure that the sums would be right in the second year. It is possible.
I was surprised at the enormity of the problem that was created, partly because of the joint venture between local and central Government. Central Government have some responsibility for the tasks that local government has to carry out. We spend time legislating and that legislation has to be carried out at local level. Sometimes our Ministers are not responsive enough.
It is important to remember that locally elected people can set priorities and budgets well in advance of the time when they must make the rate. They can start that process almost immediately after the rate-making in March. To work out and set the priorities is a much better way to make a rate and assess a budget that conforms to the targets that central Government, rightly, have to impose on local government if they are to have any control and make any contribution to helping those who have to pay the rates.
My right hon. Friend the Secretary of State rightly said today that we as Members have a responsibility to our constituents when they plead with us to control local government expenditure if locally elected councillors are incapable of doing that job for them. Electors have two resorts. They elect local councillors who should do the job. If they do not do that job electors must be able to resort to Members of Parliament to take some form of control.
My experience leads me to the reasonable conclusion that local government should be expected to set budgets sensibly and be responsive to the requirements and needs of the electorate. I agree with the hon. Member for Woolwich (Mr. Cartwright) that democratically elected people should take responsibility and respond adequately to local needs. That can be done within the constraints of grant allocation.
Some authorities have already begun to reduce the number of people whom they employ. The size of local government staff must be reduced. I refer not to those who deliver services at the sharp end, but to the faceless men who sit inside the town halls. The right hon. Member for Manchester, Gorton (Mr. Kaufman) demonstrated amusingly how councillors can go on spending sprees on the rates, but we never talk about the people who sit in our town halls. We do little to try to rid town halls of such people. Sometimes we make a cut across the board to achieve hastily cobbled savings. I worry when local authorities say, "Heavens, we have to try to reduce rates by 1 per cent. or 3 per cent." They do not think about the problem carefully. They do not take the time to think about it. They cut 3 per cent. across the board and affect the sharp end rather than the centre of local government.

Mr. Fisher: Will the hon. Lady explain how she can distinguish between the value of a social worker and a clerical assistant, or faceless person, sitting in a town hall, who supports that social worker and allows him to get on with his casework?

Mrs. Rumbold: I can do that to a certain extent. The social worker is delivering a service directly to a constituent. His job is needed. So many forms and bits of paper fly between central and local government that a clerical assistant is necessary. We should do something about that so that we reduce the amount of work in the various bureaucracies. The Secretary of State said that Government Departments have managed to reduce their staffing levels. Local government also has a good record, but unless control of local politicians is very firm the current progress could slide away within months.
I have tried to draw attention to two important aspects. First, it is possible for local authorities to budget properly and well within their targets. Secondly, and more important, locally elected politicians must accept the responsibility for delivering local services, and the Government must accept that locally elected politicians have that responsibility.

Mr. Bill Michie: During the past hour I have become more and more dismayed by the speeches of Conservative Members. The fact that we are Members of Parliament is no excuse for being pompous or for believing that we know better than local authorities. Local authorities have tremendous responsibilities, some of which we cannot always understand, and certainly cannot experience, because we have a different job to do.
I speak with the experience of 12 or 13 years on the local authority in Sheffield, which I consider to be one of the most progressive authorities in the country.—;[HoN. MEMBERS: "Oh."] Hon. Members should come to Sheffield and they would soon find out what local government and democracy are all about. I hope that they will understand from what I am about to say how responsible councils, such as Sheffield, are and how dishonest and hypocritical this Conservative Government have been on local democracy.
The former Secretary of State for the Environment, the right hon. Member for Henley (Mr. Heseltine), came to Sheffield last year. In fact, he came to see whether any of our houses had fallen down since he reduced the grant. He was fortunate enough to be there when Sheffield was receiving a prize for winning the "city in bloom" competition. He said that it was marvellous to have an industrial city that had so many trees and flowers, and clean air. I pointed out to him that the clean air programme, many years previously, had cost about £11 million, and that if this Government had been in power at the time the scheme would probably never have got off the ground, and that Sheffield, as it was called half a century ago, would still be the devil's kitchen. It is not central Government who deal with matters such as clean air, but local government, elected annually. Local government is responsible for doing the best it can for the people who have supported it.
Sheffield and other similar towns and cities have improved their services and environment, picking up the bits and pieces left after years of exploitation by private industry. They have picked up their responsibilities to such an extent that the local people have responded in their usual way by supporting a Labour council in the city and also electing the same number of Labour Members of Parliament as they have done for many years. That they will continue to do. It has been argued that the response of the electorate does not prove the local government case, but I say that the response in Sheffield and many other places proves that case.
I deplore the argument that councils make their own decisions to spend, whatever happens, and that they have no responsibility. The hon. Member for Mitcham and Morden (Mrs. Rumbold) described a council meeting as a few people saying "What can we spend today, if we have anything left in the coffers?" Local government does not work in that way. Three-year and four-year programmes are common in Sheffield, although unfortunately now, as has been said before, it is a case of Russian roulette. One is never quite sure where the cuts will come, how much they will be, and whether one is in the penalty box. That is what has been happening ever since this Government came to power. On the RSG orders for 1981–82, Sheffield had a penalty of £6·518 million. That went on to the next year, when we had about 1 per cent. inflation in cash terms. That, of course, is nonsense.
The amounts that have been given to local authorities are quite unrealistic. How do local authorities pay for the extra burdens that have been put on them by the Government— for instance, statutory sick pay, joint funding, increased improvement grants, and housing? Those matters all have revenue implications that have not been properly and honestly considered by the Conservative Government. For Sheffield, this year, that has meant a penalty of £14·179 million, which is equivalent to a 21·9p rate increase. Sheffield had increased the rate by only 17p. If the Government had decided not to take money away from Sheffield, we could have continued or expanded our services, and reduced the rate.
It is wrong to say that the responsibility for the high rates lies solely with local authorities. In places like Sheffield, the responsibility is solely that of the Government. The loss during 1981–82 and 1983–84 now amounts to £127·3 million. That is equivalent to £258 for the average Sheffield householder over the past three years. It is not a rise in expenditure; it is not a case of irresponsible overspending; it is the fact that the Government decided to withdraw rate support and other grants. I deplore the argument that all the responsibility lies with local government.
Every so often we get people coming from London to Sheffield. The Prime Minister, who came up for the annual Cutlers' nosh-up feast, had the nerve to say that Sheffield would be much better off and industry much healthier if the city council had not put up the rates—[Interruption.] I have already explained that Sheffield need not have put up the rates if the money had not been taken away from it. The Government have fined the people of Sheffield and hurt people in business at the same time. It is there in black and white. It is no good the Prime Minister blaming the council for something that her Government have done. Her Government have done the dirty work. The right hon. Lady got the response that she deserved in Sheffield. There were thousands of people on the streets, and they were not there for her autograph.

Mr. Michael Knowles: this is the first time that I have had the privilege of addressing the House. It is a task which I suspect the individual concerned approaches, if not with downright fear, certainly with considerable trepidation, for in some senses it is both a beginning and an end. I come to this House after 13 years in local government, and I thought that I had got away from all that, but that has not happened.
First, I wish to pay tribute to my predecessors. The new Nottingham, East constituency, which I have the honour to represent, is a combination of parts of the old Nottingham, East and the old Nottingham, North. I am well aware of the high personal regard in which both William Whitlock and Jack Dunnett were held. They were both liked and highly regarded by people of all political beliefs for their work on behalf of their constituents. Many of the problems that I have taken up were handled by Jack Dunnett, and I want to put on record my thanks to him for all the help that he has given to me and his former constituents. The spirit in which the changeover took place is a testimony to the man and his work over the years.
The constituency of Nottingham, East is historically based on the old Anglo-Saxon part of the town. It is a city

constituency, and it has typical inner city problems—;housing, and immigration from both Asia and the West Indies—;stretching out to the more affluent suburbs. It has small businesses. One of my fellow Nottingham Members spoke the other day about all the large companies in the city in his constituency, and I have the feeling that many of my constituents work in those large companies. However, the economic base of my constituency is small businesses.
It was in this part of the town, where conditions are still not good, that William Booth was born and launched his crusade early in the 19th century. He marched his followers in a war against poverty and ignorance, not just because he saw them as appalling but because he saw them as an offence obscuring God's love for man.
Nottingham has long had a reputation for a turbulent and radical approach to politics, not least founded on the freelance redistributive taxation policies of Robin Hood. It was there that the Luddites flourished. The invention of the spinning jenny during the industrial revolution has been referred to, but it was in Nottingham that the Luddites flourished—;not the mindless machines and smashers of legend, but men who protested against the indignity and injustices of that time. Indeed, it was the city of Nottingham that Fergus O'Connor represented and I suspect that all Members of Parliament that have represented it since have wished that they had his command of oratory. I well recognise the traditions that I have to live up to as a Member of Parliament for Nottingham.
The points that I wish to make today perhaps stand in that tradition, although I cannot claim that the people of Nottingham are so worried about the anomalies and injustices of the present rate support grant that there is any imminent danger of their burning the castle down again. Over the years, anyone interested in local government has seen matters become steadily more complicated. When the rate support grant system was changed a few years ago one of the benefits was supposed to be its simplicity—;that we would all understand it. I must confess that I did not understand the old system and I do not understand this system either. If anything, it is more complex than the original system.
I have some questions about the new system to which I would be pleased to have answers if the Minister understands the system better than I do and can see his way to answering them. In the introduction to the 1983–84 report paragraph 1(b)(iii) says
to reflect changes to home improvement grant expenditure made in the 1983 Budget".
One effect of that is that councils that appoint administrative staff and others to carry that out will have the cost counted against both GREA and the targets. Will that be the case or will those be excluded? If they are included, it points to one of the difficulties of loading fresh duties upon councils under such a system.
The urban programme grants referred to in paragraph (f) will expire after three years. Therefore, from being 75 per cent. excluded they will become 100 per cent. included in the target. Again, that is not much incentive for councils to get a move on.
Section B, paragraph 4, makes a point about home improvement grants. If, for various reasons, such as a shortage of staff, local authorities find that they cannot spend the money on the home improvement grants, will that money revert to the rate support grant? I do not know


and I should welcome an answer on that. [HON. MEMBERS: "Hear, hear."] I admit to being somewhat disconcerted by the cheers that I am getting from the Labour Front Bench. I must be going down the wrong road.
The system has become so complex over the years that treasurers and financial directors ir local government sometimes have the feeling of being merely rate support grant loss adjusters. They have ceased to do their real job. Penalties have been introduced to de al with recalcitrant local authorities but their effect has been to make authorities suffer, whether or not they are deliberately obstructive.
Holdback from authorities that have offended is not distributed as any kind of incentive to those authorities that have met the target. One can imagine a system which punishes the baddies and rewards the goodies but under this system everybody loses. If I appear to be critical, I am. I speak with the experience of nine years as the leader of a local council and we never failed to meet the Government's financial targets. Indeed, I was lucky. My hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold) was the deputy leader of the same council and chairman of the policy and resources committee. We never failed to meet any of the Government's targets. I readily admit that luck played a part in that but we also made some political judgments and kept fast-footing the system. I admit that our success was partly due to the fact that, ideologically, we were already going down the Government's path but, in that sense, we were ahead of them so we were able to achieve those targets without as much difficulty as others. There are now Conservative local authorities that want to do what the Government want but that have the feeling that whatever they do more will be demanded of them and that their problems are just not appreciated.
It was said earlier that local government has continued spending but my figures show that between 1975 and 1981 local government spending fell from 16 per cent. to 14 per cent. in the proportion of local government expenditure. Central Government expenditure rose from 33 per cent. to 35 per cent. That does not prove that point.
Local government's problems do not seem to be appreciated. Late last year the Government wanted capital spending to increase, without apparently appreciating the revenue implications of the consequential costs. All that must be taken on board but, as I said, it is not impossible. I led a council that more than achieved that, so it is possible. I would not welcome some Labour Members as allies. The hon. Member for Woolwich (Mr. Cartwright) spoke of some of the more lunatic spending that is going on in local government and so it is—;[AN HON. MEMBER: "And in Government."] I accept that. When I had a half brick heaved at me from Whitehall I seemed to hear the sound of tinkling glass. It was being heaved from inside the biggest glasshouse in the country.
Two themes are emerging from local government. One is virtual despair. Whatever local government seems to try to do to comply with requests, it has the feeling that it has been adjudged guilty and is doomed. The other is that treasury departments now indulge all year in creative accounting. Instead of concentrating on services, councils are being forced to act like a bunch of tax accountants on Budget day, finding fresh holes in the system. That has to be done in self-defence but it is not what the system should be about. However, that is what people are being driven to.
These short-term criticisms are easy to make and they have been made many times in various forms during the debate. Not only in this but in future debates the House must consider where local government is going. The latest Government steps, taken under financial pressure, do not differ in principle from the public expenditure surveys in the 1960s and early 1970s. One has moved into the detail rather than the general, but I suspect that that was historically inevitable when the party was over. Almost any party that was in government at that stage would have progressed down the same path.
Local government, with only the rating system and the rate support grant to finance it, was almost bound to become more and more a creature of central Government under the pressure of public criticism of the rating system and the tightening of Government resources. The steady result has been the erosion of local government's independence. It may be that local government, as we have known it in Britain for over 1,000 years, is doomed and that it can no longer survive in the modern world. If that be true I would rather face up to that and the consequent problems and openly argue the case for and against than to be drifting in the direction in which we seem to be going.
We could get the worst of all worlds if the pattern of the past 20 or 30 years is allowed to continue. What has happened? First, Government have unloaded their responsibilities on to local government because it was convenient to do so, and, secondly, they have tightened the noose, through the rate support grant. The acceptance of central Government services was a poisoned chalice for local government. The best answer for local government may be to say to national Government "Take those services back. We would rather provide smaller and personal services paid for locally than be involved in this system."
I can see the dangers facing local government and the implications for the life of England. Local government and the civic pride it encompasses may in recent years in part have fallen into the grip of officers interested in empire-building, of unions more interested in their members than services and indeed of some lunatic political groups in the grip of alien ideologies. As a Conservative I warn against the dangers of killing the tree just because some of the fruit is poisoned. Local government, civic pride and parochial patriotism are part of the rich diversity of English life. Although it may, in the short-term, be producing problems, if we imperil the whole of that structure we may change the nature of this country in ways we cannot even imagine.
I believe that tinkering must cease. We must soon provide a system that encourages proper local accountability for local service locally paid for. The new Bill could be a new basis for local government and not just another move in what seems to have become an endless game of political chess.

Mr. Derek Fatchett: My first and pleasant task is to congratulate the hon. Member for Nottingham, East (Mr. Knowles) on his maiden speech. The hon. Gentleman showed a rare understanding of his city and constituency and a detailed interest in local government in which he has been involved for some time. At one stage during his speech he appeared concerned that Opposition Front Bench Members were nodding in


agreement and amusement at some of his comments. The hon. Gentleman should not worry about that. His real concern must come when the Government Front Bench start to nod in agreement and amusement at what he is saying.
The hon. Gentleman and other Conservative Members, in a particularly interesting aspect of the debate, put forward a series of special cases, all of which show the injustice, unfairness and arbitrary nature of the existing system.
We heard from the hon. Member for Cambridgeshire, South-West (Sir A. Grant) an eloquent example of special pleading. The hon. Gentleman argued that the system as a whole was correct, but that somehow it was wrong in relation to Cambridgeshire. We have heard other such examples. I should like to throw in yet another example of the injustice and unfairness of the system by referring to west Yorkshire.
In the revenue budget for west Yorkshire for 1983–84, there was an increase of budgeted expenditure of just over 2 per cent. above the target set unilaterally by the Government. That led to an increase in the rate precept for the west Yorkshire area of 2·7 per cent.— well below the rate of inflation at that stage, and, I suspect, at the end of the 1983 financial year.
It was interesting to note that the Secretary of State said that all the metropolitan counties—;without exception—;were overspenders. It may be worth while contrasting the average rate bill in Labour-controlled west Yorkshire with the average rate bill for a ratepayer in Conservative-controlled Surrey. In west Yorkshire the annual average rate bill is £183. That is 48 per cent. less than the average rate bill in Conservative-controlled Surrey. It may well be that when the Secretary of State considers those figures he will decide to abolish not the metropolitan county of west Yorkshire, but the shire county of Surrey. I think there is support on the Opposition Benches for abolishing Surrey. Those figures do not suggest that west Yorkshire is an overspender. To the present Government it is not a responsible authority. The authority has been penalised to the tune of nearly £1 million—;a penalty that will cost jobs and services and will rob the economy of west Yorkshire of almost £1 million that could usefully generate income and other activities.
If we consider further in detail, we see the contradictory nature of the system the Government are now operating. According to the Government's grant-related expenditure assessment for west Yorkshire, the county council is currently overspending on the police by more than 11 per cent. and on the fire service by more than 30 per cent. Yet, in both those cases, the budgets are worked out according to the guidelines established by another Government Department—;the Home Office. The police establishment is agreed with the Home Office, yet, according to the GREA, the west Yorkshire county council, in holding its budget and meeting the figures of the Home Office, is an overspender.
The county council could, of course, have achieved the Government's targets for the police. If it had done so, it would have led in the financial year 1983–84 to the redundancy of 100 uniformed members of the west Yorkshire police. We have heard a great deal from the Conservative party about its belief in law and order. We saw in the debate on capital punishment—;I saw it in the

local newspapers—;how Conservative Members for west Yorkshire were lining up to defend law and order and to support the restoration of capital punishment. I should like to ask tonight, regarding the reduction in the money that is made available to west Yorkshire, whether they will vote for or against the Government. Will they vote against the Government and support the law and order platform on which they were elected? Let us make no bones about it. If they vote for the Government on this occasion, every Conservative Member in west Yorkshire will be voting for a reduction in the uniformed police force. The county council should be applauded for its attitude. The irresponsible Conservative party shows a complete disregard for the needs of law and order throughout west Yorkshire.
I come now, Mr. Deputy Mayor—;[Horn. MEMBERS: "Mr. Deputy Speaker."] I apologise, Mr. Deputy Speaker. It is experience of local government that does it. I come now to the notion of overspend. The arbitrary nature of the system means that the notion of overspend cannot be objectively defined. It is partial, it is political, and it is based on a set of ideological beliefs that Conservative Members do not hide, except when it comes to their own authorities and their own back gardens. Any pretence to objectivity or to a logical system is dropped by the Government. If it were a logical system, one could argue that the grant-related expenditure assessments which go through some mysterious mathematical process were the basis of objectivity. The Government dispensed with GREA—;they do not use it—;and replaced it with an alternative set of targets called expenditure targets. Those targets are not related to the GREA. They are not objective; they are clearly political. It is against those targets that the Government judge overspend.
Because of that, and because we are dealing with an arbitrary and bureaucratic matter, we are faced with a clear device on the part of the Government to control local authorities by controlling their spending and, above all, by eroding and undermining local democracy.
In an intervention earlier, my hon. Friend the Member for Normanton (Mr. O'Brien) pointed out that the resposibility in local government lay with the electors, because they had the right to reject policies, councillors and parties with which they did not agree. It is in the ballot box that the sovereign responsibility for local government should reside. We now face a system whereby that sovereign responsibility is passing at an ever-increasing pace from the electorate on to the desks of the Minister and the bureaucrats in Whitehall.
Some people will say, "Why bother to vote?" Others will say, "Why bother to stand for local government when those who make the real decisions, those with real power, are those we cannot control and whom we never see?" If I needed to illustrate further the nature of that arbitrary power, I need go no further than the announcement made by the Secretary of State earlier, when he said that the spending targets of local authorities would be announced next week. Conveniently, the announcement will be made in the first week in August— the first week of the parliamentary recess—;when Parliament will not have an opportunity to supervise the right hon. Gentleman's decision. The local electorate is being kept out of the system, and the same is happening to Parliament.
The Government have devised a system that is hardly comprehensible. Even Conservative Members have pointed that out. It is also manifestly unfair to many areas.


More important, in a constitutional and political sense, what is proposed is a fundamental erosion of local democracy. One can only hope that tonight and on subsequent occasions Conservative Members will recognise that, in exercising their ideological vengeance against Labour-controlled councils, they are also endangering the democracy for which many of us have fought.

Mr. Richard Hickmet: I regret to say that hon. Members must go through the ordeal of listening to another maiden speech, and I ask for the indulgence of the House. I have the privilege and honour to represent the new constituency of Glanford and Scunthorpe, which is based on the industrial garden town of Scunthorpe, a town which for some reason causes considerable amusement to the patrons of Ronnie Scott's night club. Mr. Scott has been cracking jokes about Scunthorpe for the last 20 years.
It is a fine town with broad streets and beautiful parks, with one of the best parks departments in the country. It is bounded by the Trent in the west, the Humber in the north, the river Ancholme in the east and the village of Messingham in the south. In its rural areas, it has some of the finest agricultural land in what used properly to be described as north Lincolnshire. A house or bungalow can be bought in my constituency for £20,000 to £25,000. That money will buy a fine dwelling with a fine garden. It is one of the most pleasant parts of the country in which to live.
Nobody can talk about my constituency without mentioning steel. It is a steel town. I have the privilege to be the only Conservative Member of Parliament to represent one of the five major integrated steel plants; the town contains the great steel works of Appleby Frodingham. Since 1979, the old Lysaghts works, Normanby Park, has closed. About 11,000 men have been made redundant from BSC and there is 16 per cent. unemployment in the travel-to-work area alone. In Scunthorpe town, unemployment is running at well over 20 per cent.
However, Scunthorpe has one of the best, hardest-working work forces in the country, with a wonderful reputation for industrial relations. A statement was made earlier about the visit of the Secretary of State for Trade and Industry to Luxembourg, where new steel quotas were discussed and agreed. The closures in my constituency were caused by over-capacity in the system in BSC, by the uncompetitiveness of BSC and by its over-manning. I am proud to say, however, that the steel works of Appleby Frodingham is the jewel in the crown of BSC, and I am privileged to represent this town and its great steel works.
I wish to pay my tribute and respect to those who have represented my seat in the past. My hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) used to represent the old Brigg and Scunthorpe constituency. His kindness and help to me as a new Member is exceeded only by his delight at no longer being the youngest Member of this honourable House. I should also mention Mr. John Ellis, who was my opponent at the recent general election. He represented the former constituency with great distinction and honour and the victory in my constituency was saddened by the fact that it was al: the cost of John Ellis.
Local authority expenditure is reflected by the rates, a subject of great significance to my constituency.

Humberside county council has been penalised by the Government for exceeding Government spending targets and budgets, and £9 million in rate support grant has been taken away from that authority's expenditure. While acknowledging, indeed applauding, the decision to take the £9 million away from Humberside county council, I urge my right hon. Friend to say what will happen in the next financial year when that county council levies its rates. Without capping at this stage the ability of Humberside county council to pass on that cut in rate support grant, I am most concerned about the rate rise that will take place next year and the effect of high rates on business and the prospects for employment in my constituency.
Humberside county council is one of the highest rated county councils in the country. The effect of its high rates policies on businesses and employment prospects must be well known. Businesses which must pay the crippling level of rates precepted by that authority all too often face the prospect of going into liquidation.
Those businesses which might come into my constituency—;it has an enterprise zone, development status and fine road, rail and air links—;are deterred from so doing because of the high rates levied by that local authority. The prospect is that in 1984–85 there will be a further significant increase.
As a former local councillor, I believe that it is not the function of local government to employ people. It is to provide those services which it is under a statutory obligation to provide and which it believes should be provided according to the needs of its population, though at the lowest reasonable cost.
I was interested to hear the attack on Wandsworth council by the hon. Member for Islington, North (Mr. Corbyn) and about its privatisation policies in refuse, street cleansing and garden maintenance. I was chairman of the committee which put the private contractors into Wandsworth. I assure the House that if— as hon. Members were invited to do—;one knocks on 20 doors to find out what the people of Wandsworth think about the collection of their refuse, they will say that, for the first time, it is being collected efficiently, cheaply and according to the instructions of the council and not according to the instructions of NUPE shop stewards.
I urge that all local authorities be required to invite tenders for the collection of refuse in their areas, for street cleansing, for the maintenance of their paths and for other suitable undertakings. It is appropriate not to confine the privatisation exercise to areas in which there is a high manual content. Professional services in local authorities such as valuation and planning could well go out to private contractors. The purpose of the exercise is to provide services, and not necessarily to employ.
I thank you, Mr. Deputy Speaker, and the House for the indulgence that has been extended to me.

Mr. Simon Hughes: I congratulate the hon. Member for Glanford and Scunthorpe (Mr. Hickmet) on his maiden speech. We have spoken after each other before in our earlier experiences in other places. I do not know what the score is in terms of who beat whom when we contested on behalf of others across courtroom floors but I guess that in the next year or two he may gain a few marches on me. I hope that in the course of time I shall be able to catch up and overtake


him in terms of successes in the House. I wish him well in representing his constituents and I wish them well under his representation. That is felt especially strongly, as the son of a Lincolnshire mother who would want to ensure that her fellow countrymen and countrywomen were in good hands.
Sometimes the Secretary of State has made decisions that were unjustified but which, given the Government's philosophy, were logical. The reports that are before us are not only unjustified but, as every participant in the debate save the Secretary of State has conceded, entirely illogical. The Government stand before us as the apostle of noninvolvement, as a Government who believe in standing back. Yet they are intervening more and more in what is becoming a greater and greater mess.
I recognise that I must be brief on this occasion. I do not intend to speak for long not least because I was also in the Chamber 12 hours ago when I participated in a debate during the consideration of the Consolidated Fund Bill, unlike some other hon. Members who were probably tucked up in bed.
The local government rate support grant system has many defects. First, it encourages expenditure that local authorities may not wish to make. Unless they spend this year they may not be guaranteed the money that they require for next year. Many county councils are complaining that they are being forced to do things that they would otherwise choose not to do. Secondly, the system fines almost everybody. We have had examples of counties that are as careful, cautious and conservative as Cornwall and Warwickshire, as well as examples of boroughs that are as Socialist as Sheffield. We have heard that one year they find themselves penalised and the next find themselves receiving back the money to which they thought they were entitled. This militates -against accounting and sensible budgeting, confuses ratepayers and the local populace and does everything that local authorities would wish to avoid in confusing and adding to the burdensome bureaucracy of local government.
The Government proclaim the desire to remove bureaucracy but what they propose will add to bureaucracy over and over again. The reports seek to adjust totals of relevant expenditure, to make a number of changes to grant-related expenditure assessments, to re-determine grant-related poundages, to determine new safety net multipliers and to implement proposals that relate to the same budget on which a report was introduced only six months ago, which took a different approach.
The rate support system is based on a false premise that has been identified by a number of right hon. and hon. Members. The false premise is that local government is spending heavily and the central Government are cutting back. The figures prove exactly the opposite. They show that, in general, local government has complied with the strictures of central Government. If we select any area of local government expenditure— the arts, recreation, housing and social services, for example—;and compare it with central Government expenditure in the same area, the percentage decrease in local government expenditure has been far greater than that achieved by central Government. The Government are seeking in an amazingly complicated way to attack a system of expenditure in local authorities of all political colours when they should be concentrating on reducing their own

wasteful central expenditure and leaving local authorities free to determine the form and direction of their expenditure, as the authorities closest to the local electorate.
Liberal Members share with Labour Members, and an increasing number of Conservative Members, a belief in local autonomy. We believe that local government is a good thing. We believe that local authorities should be allowed to decide where their spending priorities should lie. The Government are conspiring against the advice of Conservative, Labour, Liberal and Social Democratic party members throughout the land, including Conservative councillor after Conservative councillor. These experts are telling the Government not to interfere and are pointing out the folly of interference, yet the Government persist.
Last week Conservative Members were telling us, when we were debating capital punishment, that we should listen to those whom we represent. Will they have consulted those whom they represent before passing through the Government Lobby tonight, or will they be going against the advice of the experts in their own ranks in this place and in local government? Will they be acting against the advice of their experts and do they intend to follow the Government in compounding the problems of a system that is increasingly futile and muddle-headed?
The sooner we start again and the sooner the Government apply themselves to producing proposals for the reform of local government finance—;we hear now that they will do so during the summer recess— the sooner we may be able to produce an equation that works. The equation should be based on the principle that local government should raise its own finances and should then be able to spend them. Local government is now being told that it cannot raise as much as it wants and that it cannot even spend what it raises. It is a contradiction in philosophy, in policy and in the Government's approach, and it is about time that we heard the last of it.

Mr. Kaufman: With the leave of the House, Mr. Deputy Speaker, I shall make a brief contribution at the end of an excellent, enthusiastic and well-informed debate. Those who have sat through these debates in recent years will probably agree that this is one of the best that we have had. One of the reasons is that scarcely a Member on either side of the House has had a good word to say for the Government. That is a reflection of how well informed the debate has been.

Sir Anthony Grant: I was not critical of the Government.

Mr. Kaufman: The hon. Gentleman said some very nice things as a cover for what he really intended to say in talking about the county council in the area which he represents. We all know that very well.
I wish particularly to congratulate the three Conservative Members who have graced the debate with their maiden speeches. The Opposition were particularly touched when the hon. Members for Glanford and Scunthorpe (Mr. Hickmet) and for Hyndburn (Mr. Hargreaves) paid tributes to their Labour predecessors. It was especially generous of the hon. Member for Glanford and Scunthorpe to do so, as John Ellis has not been a Member of this place for some time. We greatly appreciate


the hon. Gentleman's remarks. We liked, too, what the hon. Member for Hyndburn said about Arthur Davidson, who was a popular man in the House. The hon. Gentleman's great generosity to Arthur Davidson will stand him in good stead should the time come when he makes a speech with which we disagree. On this occasion he did not do that, and that makes it even easier for us to congratulate him.
I offer particular congratulations to the hon. Member for Nottingham, East (Mr. Knowles), without wishing to be invidious to his hon. Friends the Members for Glanford and Scunthorpe and for Hyndburn. The hon. Gentleman made one of the best maiden speeches that I have heard for a long time. It was expert and amusing, and it had the major merit to Opposition Members of being magnificently critical of the Government. We look forward to hearing from the hon. Gentleman again. Moreover, we look forward to the hon. Members whom I have mentioned joining us in the Division Lobby. We also look forward to their joining Opposition Members in insisting that the Secretary of State publishes his targets and the White Paper this week. It is unacceptable for Parliament to go into recess with those documents unpublished. In the friendliest way, I give the Secretary of State an amicable mid-summer warning that only the publication of that White Paper within the next two days will save him from a fate that is so condign that I hesitate to describe it.

8 pm

Mr. Patrick Jenkin: The right hon. Member for Manchester. Gorton (Mr. Kaufman) started his speech with Sartre and ended it with a parody of "King Lear". Perhaps I can set his mind at rest. On 23 June, referring to the White Paper on rating limitation, I said:
I cannot guarantee to publish it while the House is still sitting."—;[Official Report, 23 June 1983; Vol. 44, c. 253.]
That has always been my view, as we are up against an exceedingly tight timetable. I said precisely the same today. The right hon. Gentleman seemed to take me to task about that, but he was being a little disingenuous.
I, too, should like to congratulate my hon. Friends the Members for Hyndburn (Mr. Hargreaves), for Nottingham, East (Mr. Knowles) and for Glanford and Scunthorpe (Mr. Hickmet) on their admirable maiden speeches. I was happy to spend some time in the constituency of my hon. Friend the Member for Hyndburn, on his behalf, before the general election. I assure him that the Government are continuing to study the construction and details of the GREA and we shall note carefully what he said.
My hon. Friend the Member for Nottingham, East spoke robustly about the independence of local government. He spoke with great eloquence and we look forward to hearing from him again.
My hon. Friend the Member for Glanford and Scunthorpe expressed a widely felt anxiety about the likely rating behaviour of high-spending authorities— he is directly concerned with the Humberside council— in 1984–85 before the Government's rate limitation legislation can take effect. I assure him that we have that point firmly in mind and are trying to find ways in which to deal with it.
I welcome the speech of my hon. Friend the Member for Cambridgeshire, South-West (Sir A.. Grant), and I thank him for his kind personal remarks. I assure him that no major spending authority received a higher increase in

its target above the previous year's budget than Cambridgeshire. It was on the maximum target for this year over last year's budget.
Throughout all the speeches of Opposition Members has run the assumption that it is impossible to have local democracy and to stay within the Government's spending guidelines. That is nonsense. The great majority of local authorities have managed to contain their spending firmly within the Government's guidelines, and they are no less democratic for that. Because the minority have failed to do that, we have had to erect what I admit is a complicated system of control. I shall introduce a Bill later this Session to give the Government power to control rates. That is the heart of the matter. The right hon. Member for Gorton may huff and puff, but I shall not deal in detail with some of the fallacies. That is what the country voted for, and that is what the Government will do.

Question put:—;

The House divided: Ayes 286, Noes 174.

Division No. 41]
[8.4 pm


AYES


Aitken Jonathan
Cope, John


Alexander, Richard
Cormack, Patrick


Alison, Rt Hon Michael
Couchman, James


Amess, David
Cranborne, Viscount


Arnold, Tom
Critchley, Julian


Ashby, David
Crouch, David


Aspinwall, Jack
Currie, Mrs Edwina


Atkins, Rt Hon Sir H.
Dickens, Geoffrey


Atkins Robert (South Ribble)
Dicks, T.


Baker, Kenneth (Mole Valley)
Dorrell, Stephen


Baker, Nicholas (N Dorset)
Douglas-Hamilton, Lord J.


Baldry, Anthony
Dover, Denshore


Batiste, Spencer
du Cann, Rt Hon Edward


Bellingham, Henry
Dunn, Robert


Bendall, Vivian
Durant, Tony


Bennett, Sir Frederic (T'bay)
Dykes, Hugh


Benyon, William
Edwards, Rt Hon N. (P'hroke)


Berry, Sir Anthony
Eggar, Tim


Best, Keith
Evennett, David


Bevan, David Gilroy
Eyre, Reginald


Biffen, Rt Hon John
Fallon, Michael


Biggs-Davison, Sir John
Farr, John


Blackburn, John
Favell, Anthony


Body, Richard
Fookes, Miss Janet


Bonsor, Sir Nicholas
Forsyth, Michael (Stirling)


Boscawen, Hon Robert
Forth, Eric


Bottomley, Peter
Fowler, Rt Hon Norman


Bowden, Gerald (Dulwich)
Fox, Marcus


Boyson, Dr Rhodes
Franks, Cecil


Braine, Sir Bernard
Fraser, Rt Hon Sir Hugh


Brandon-Bravo, Martin
Fraser, Peter (Angus East)


Bright, Graham
Fry, Peter


Brinton, Tim
Gale, Roger


Brown, M. (Brigg &amp; Cl'thpes)
Galley, Roy


Bruinvels, Peter
Garel-Jones, Tristan


Bryan, Sir Paul
Goodlad, Alastair


Budgen, Nick
Gorst, John


Burt, Alistair
Gow, Ian


Butterfill, John
Gower, Sir Raymond


Carlisle, John (N Luton)
Grant, Sir Anthony


Carlisle, Kenneth (Lincoln)
Greenway, Harry


Carttiss, Michael
Gregory, Conal


Chalker, Mrs Lynda
Griffiths, E. (B'y St Edm'ds)


Channon, Rt Hon Paul
Griffiths, Peter (Portsm'th N)


Chapman, Sydney
Ground, Patrick


Chope, Christopher
Grylls, Michael


Clark, Hon A. (Plym'th S'n)
Gummer, John Selwyn


Clark, Dr Michael (Rochford)
Hamilton, Neil (Tatton)


Clark, Sir W. (Croydon S)
Hampson, Dr Keith


Clarke Kenneth (Rushcliffe)
Hanley, Jeremy


Clegg, Sir Walter
Hargreaves, Kenneth


Cockeram, Eric
Harris, David


Conway, Derek
Harvey, Robert


Coombs, Simon
Haselhurst, Alan






Hawkins, C. (High Peak)
Meyer, Sir Anthony


Hawkins, Sir Paul (SW N'folk)
Miller, Hal (B'grove)


Hawksley, Warren
Mills, Iain (Meriden)


Hayhoe, Barney
Mills, Sir Peter (West Devon)


Hayward, Robert
Mitchell, David (NW Hants)


Henderson, Barry
Moate, Roger


Heseltine, Rt Hon Michael
Morris, M. (N'hampton, S)


Hickmet, Richard
Morrison, Hon P. (Chester)


Hicks, Robert
Moynihan, Hon C.


Higgins, Rt Hon Terence L.
Mudd, David


Hill, James
Murphy, Christopher


Hirst, Michael
Neale, Gerrard


Hogg, Hon Douglas (Gr'th'm)
Needham, Richard


Holland, Sir Philip (Gedling)
Nelson, Anthony


Holt, Richard
Neubert, Michael


Hooson, Tom
Newton, Tony


Hordern, Peter
Nicholls, Patrick


Howard, Michael
Normanton, Tom


Howarth, Alan (Stratf'd-on-A)
Norris, Steven


Howarth, Gerald (Cannock)
Onslow, Cranley


Howell, Rt Hon D. (G'ldford)
Osborn, Sir John


Howell, Ralph (N Norfolk)
Ottaway, Richard


Hubbard-Miles, Peter
Page, John (Harrow W)


Hunt, David (Wirral)
Page, Richard (Herts SW)


Hunt, John (Ravensbourne)
Parkinson, Rt Hon Cecil


Hunter, Andrew
Parris, Matthew


Irving, Charles
Pattie, Geoffrey


Jackson, Robert
Pawsey, James


Jenkin, Rt Hon Patrick
Peacock, Mrs Elizabeth


Jessel, Toby
Percival, Rt Hon Sir Ian


Johnson-Smith, Sir Geoffrey
Pink, R. Bonner


Jones, Gwilym (Cardiff N)
Pollock, Alexander


Jones, Robert (W Herts)
Porter, Barry


Joseph, Rt Hon Sir Keith
Powley, John


Kellett-Bowman, Mrs Elaine
Prentice, Rt Hon Reg


Key, Robert
Price, Sir David


Kilfedder, James A.
Pym, Rt Hon Francis


King, Roger (B'ham N'field)
Raffan, Keith


King, Rt Hon Tom
Rhodes James, Robert


Knight, Gregory (Derby N)
Rhys Williams, Sir Brandon


Knowles, Michael
Ridley, Rt Hon Nicholas


Knox, David
Ridsdale, Sir Julian


Lamont, Norman
Rifkind, Malcolm


Lang, Ian
Robinson, Mark (N'port W)


Latham, Michael
Roe, Mrs Marion


Lawler, Geoffrey
Rossi, Sir Hugh


Lawrence, Ivan
Rost, Peter


Lawson, Rt Hon Nigel
Rowe, Andrew


Lee, John (Pendle)
Rumbold, Mrs Angela


Leigh, Edward (Gainsbor'gh)
Ryder, Richard


Lennox-Boyd, Hon Mark
Sackville, Hon Thomas


Lester, Jim
St. John-Stevas, Rt Hon N.


Lewis, Sir Kenneth (Stamf'd)
Sayeed, Jonathan


Lightbown, David
Shaw, Giles (Pudsey)


Lloyd, Ian (Havant)
Shaw, Sir Michael (Scarb')


Lloyd, Peter, (Fareham)
Shelton, William (Streatham)


Lord, Michael
Shepherd, Colin (Hereford)


Lyell, Nicholas
Shersby, Michael


McCrindle, Robert
Silvester, Fred


McCurley, Mrs Anna
Sims, Roger


Macfarlane, Neil
Skeet, T. H. H.


MacKay, Andrew (Berkshire)
Smith, Tim (Beaconsfield)


MacKay, John (Argyll &amp; Bute)
Soames, Hon Nicholas


McNair-Wilson, P. (New F'st)
Spence, John


McQuarrie, Albert
Spencer, D.


Madel, David
Spicer, Michael (S Worcs)


Major, John
Squire, Robin


Malins, Humfrey
Stanbrook, Ivor


Malone, Gerald
Stern, Michael


Maples, John
Stevens, Lewis (Nuneaton)


Marland, Paul
Stewart, Allan (Eastwood)


Marlow, Antony
Stradling Thomas, J.


Marshall, Michael (Arundel)
Tebbit, Rt Hon Norman


Mates, Michael
Terlezki, Stefan


Mather, Carol
Thompson, Donald (Calder V)


Maude, Francis
Thompson, Patrick (N'ich N)


Mawhinney, Dr Brian
Thornton, Malcolm


Maxwell-Hyslop, Robin
Townend, John (Bridlington)


Mayhew, Sir Patrick
Townsend, Cyril D. (B'heath)


Merchant, Piers
Tracey, Richard





Trippier, David
Wells, Bowen (Hertford)


van Straubenzee, Sir W.
Wheeler, John


Vaughan, Dr Gerard
Wilkinson, John


Waddington, David
Wolfson, Mark


Wakeham, Rt Hon John
Wood, Timothy


Waldegrave, Hon William
Young, Sir George (Acton)


Walden, George
Younger, Rt Hon George


Walker, Bill (T'side N)



Ward, John
Tellers for the Ayes:


Wardle, C. (Bexhill)
Mr. Archie Hamilton and


Warren, Kenneth
Mr. Tim Sainsbury.


NOES


Alton, David
Foot, Rt Hon Michael


Anderson, Donald
Forrester, John


Archer, Rt Hon Peter
Foster, Derek


Ashdown, Paddy
Fraser, J. (Norwood)


Ashley, Rt Hon Jack
Freeson, Rt Hon Reginald


Ashton, Joe
Garrett, W. E.


Atkinson, N. (Tottenham)
Godman, Dr Norman


Bagier, Gordon A. T.
Gould, Bryan


Banks, Tony (Newham NW)
Gourlay, Harry


Barnett, Guy
Hamilton, W. W. (Central Fife)


Barron, Kevin
Hardy, Peter


Beckett, Mrs Margaret
Harman, Ms Harriet


Beith, A. J.
Harrison, Rt Hon Walter


Bell, Stuart
Haynes, Frank


Bennett, A. (Dent'n &amp; Red'sh)
Healey, Rt Hon Denis


Bermingham, Gerald
Heffer, Eric S.


Bidwell, Sydney
Holland, Stuart (Vauxhall)


Boyes, Roland
Home Robertson, John


Bray, Dr Jeremy
Howells, Geraint


Brown, Gordon (D'f'mline E)
Hoyle, Douglas


Brown, Hugh D. (Provan)
Hughes, Mark (Durham)


Brown, N. (N'c'tle-u-Tyne E)
Hughes, Robert (Aberdeen N)


Brown, R. (N'c'tle-u-Tyne N)
Hughes, Roy (Newport East)


Brown, Ron (E'burgh, Leith)
Hughes, Sean (Knowsley S)


Bruce, Malcolm
Hughes, Simon (Southwark)


Buchan, Norman
Janner, Hon Greville


Caborn, Richard
John, Brynmor


Callaghan, Rt Hon J.
Jones, Barry (Alyn &amp; Deeside)


Callaghan, Jim (Heyw'd &amp; M)
Kaufman, Rt Hon Gerald


Campbell, Ian
Kennedy, Charles


Cartwright, John
Kilroy-Silk, Robert


Clark, Dr David (S Shields)
Lamond, James


Clay, Robert
Leadbitter, Ted


Cocks, Rt Hon M. (Bristol S.)
Leighton, Ronald


Cohen, Harry
Lewis, Ron (Carlisle)


Coleman, Donald
Lewis, Terence (Worsley)


Concannon, Rt Hon J. D.
Litherland, Robert


Conlan, Bernard
Lloyd, Tony (Stretford)


Cook, Robin F. (Livingston)
Lofthouse, Geoffrey


Corbett, Robin
Loyden, Edward


Corbyn, Jeremy
McCartney, Hugh


Cowans, Harry
McDonald, Dr Oonagh


Cox, Thomas (Tooting)
McGuire, Michael


Craigen, J. M.
McKelvey, William


Dalyell, Tam
Mackenzie, Rt Hon Gregor


Davies, Rt Hon Denzil (L'lli)
McNamara, Kevin


Davies, Ronald (Caerphilly)
McTaggart, Robert


Davis, Terry (B'ham, H'ge H'l)
McWilliam, John


Deakins, Eric
Madden, Max


Dewar, Donald
Marek, Dr John


Dixon, Donald
Mason, Rt Hon Roy


Dobson, Frank
Maxton, John


Dormand, Jack
Maynard, Miss Joan


Dubs, Alfred
Meadowcroft, Michael


Duffy, A. E. P.
Michie, William


Eadie, Alex
Mikardo, Ian


Eastham, Ken
Millan, Rt Hon Bruce


Edwards, R. (W'hampt'n SE)
Morris, Rt Hon A. (W'shawe)


Evans, Ioan (Cynon Valley)
Morris, Rt Hon J. (Aberavon)


Evans, John (St. Helens N)
O'Brien, William


Ewing, Harry
O'Neill, Martin


Fatchett, Derek
Orme, Rt Hon Stanley


Faulds, Andrew
Park, George


Field, Frank (Birkenhead)
Parry, Robert


Fields, T. (L'pool Broad Gn)
Patchett, Terry


Fisher, Mark
Pavitt, Laurie


Flannery, Martin
Pendry, Tom






Penhaligon, David
Smith, C.(Isl'ton S &amp; F'bury)


Pike, Peter
Snape, Peter


Powell, Raymond (Ogmore)
Soley, Clive


Prescott, John
Spearing, Nigel


Radice, Giles
Thomas, Dr R. (Carmarthen)


Redmond, M.
Thompson, J. (Wansbeck)


Rees, Rt Hon M. (Leeds S)
Thorne, Stan (Preston)


Richardson, Ms Jo
Tinn, James


Roberts, Allan (Bootle)
Varley, Rt Hon Eric G.


Roberts, Ernest (Hackney N)
Wainwright, R.


Robinson, G. (Coventry NW)
Warden, Gareth (Gower)


Rogers, Allan
Welsh, Michael


Rooker, J. W.
Wigley, Dafydd


Ross, Ernest (Dundee W)
Williams, Rt Hon A.


Ross, Stephen (Isle of Wight)
Winnick, David


Rowlands, Ted
Woodall, Alec


Sedgemore, Brian
Wrigglesworth, Ian


Sheerman, Barry
Young, David (Bolton SE)


Sheldon, Rt Hon R.



Shore, Rt Hon Peter
Tellers for the Noes:


Short, Ms Clare (Ladywood)
Mr. James Hamilton and


Short, Mrs R.(W'hampt'n NE)
Mr. Norman Hogg.


Skinner, Dennis

Question accordingly agreed to.

Resolved,
That the Rate Support Grant Supplementary Report (England) 1983/84 (House of Commons Paper No. 26), which was laid before this House on 4th July, be approved.

Resolved,
That the Rate Support Grant Supplementary Report (England) (No. 3) 1981/82 (House of Commons Paper No. 25), which was laid before this House on 4th July, be approved.

Rate Support Grant (Wales)

The Secretary of State for Wales (Mr. Nicholas Edwards): I beg to move
That the Welsh Rate Support Grant Supplementary (No. 3) Report 1981/82 (House of Commons Paper No. 12), which was laid before this House on 7th July, be approved.

Mr. Deputy Speaker (Mr. Harold Walker): With this, it will be convenient to discuss the following motion:
That the Welsh Rate Support Grant Supplementary Report 1983/84 (House of Commons Paper No. 11), which was laid before this House on 7th July, be approved.

Mr. Edwards: I shall deal very quickly with the third supplementary report for 1981–82 which is simply a tidying-up operation. In January the House approved the second supplementary report for that year withholding rate support grant from authorities that had exceeded their expenditure targets. Grant withholding was based on authorities' provisional outturn expenditure figures. We now have the final outturn figures which are a little less than the earlier provisional estimates. The effect is to increase by £100,000 the total block grant payable for 1981–82, and if this report is approved that £100,000 will be paid immediately. No substantive increase in the cash limit on the relevant Vote as necessary as the money can be found from the sums withdrawn from 1983–84 if the House goes on to approve the first supplementary report. In that event a token Supplementary Estimate for the appropriate Vote will be ',laid before the House in the coming winter.
One thing this final report for 1981–82 clearly demonstrates is that, when authorities with budgets that are above their expenditure targets subsequently reduce their spending, the amount of grant withheld is also reduced or restored entirely. That is something to be borne in mind as we consider the first supplementary report for 1983–84. I would like the House to consider the background. When we came into office in 1979 local authority expenditure had been rising steadily. for many years. Between 1959 and 1979 local authority spending in Wales multiplied by a factor of 12. Over the same period the retail price index went up by a factor of five. By any reckoning that is a very substantial difference. In those two decades there was only one brief pause in the upward expenditure surge, and that was when the Labour Government, following a period of financial profligacy, were bailed out by the IMF and, without warning, imposed a sharp reduction on local authority expenditure. From 1974 onwards, the increase in current expenditure was coupled, regrettably, with a marked fall in the share of total expenditure taken for capital and by a very substantial increase in local authority manpower, which reached a record level of 128,000 by:1979. Superimposed on those extremely undesirable trends there developed a widely held expectation that local authority expenditure and manpower could continue to grow, regardless of the general condition of the economy or of the burden that this expenditure imposed on taxpayers and ratepayers alike.
When we set out to halt and to reverse those seemingly remorseless trends, many wild accusations were made. No doubt Opposition Members will continue to make them tonight—;[Interruption.] No doubt the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), when he stops intervening from a sedentary position in his usual


way and joins the debate, will use the well-established jargon that describes any modest economy as a shocking cut and any check to rising expectations as a savaging of services. The reality is very different.

Mr. Ted Rowlands: As the Secretary of State has invited me to join the debate, I should tell him that we have listened to that speech for five and a half years. He is still resting his case on the position in 1974–75. When will he acknowledge that he has been Secretary of State since 1979 and accept the responsibility for the cuts and the disappearance of our services?

Mr. Edwards: If the hon. Gentleman had not been carrying on his usual practice of mumbling from a sedentary position, he would have heard what I said.

Mr. Rowlands: I heard what the right hon. Gentleman said.

Mr. Edwards: I was seeking not to blame our predecessors for the position we inherited, but trying to say that, against that background, the jargon that he uses about savage cuts is nonsense.
Since 1978–79, local authority current expenditure in Wales has risen by about 74 per cent. This is only 3 per cent. below the rise in costs for the sector and is broadly the same as the rise in costs for the economy as a whole. At the same time, local authority manpower in Wales has fallen by about 3·5 per cent., although the two most recent surveys show an upturn. Claims that local authority staffing levels and services have been slashed simply do not stand up to examination. Even the modest restraint in expenditure achieved between 1978–79 and 1983–84 must be seen against the background of changing requirements in the single largest service provided by the local authorities— education. Between January 1979 and January 1983 pupil numbers decreased by about 49,000, almost 9 per cent., while teacher numbers decreased by only 6—;5 per cent. Public expenditure provision for social services is now rising by about 2 per cent. per annum more than local authority costs to allow principally for the marked increase in the elderly population and for the greater emphasis placed on care in the community. That is not a picture of savagely imposed cuts in service provision. We are after selective reductions in areas where demands are falling to make way for improvements in other sectors.
I am fully aware, given my wide responsibilities, that any reduction in expenditure is difficult, but if those difficult decisions had not been made—;if we had simply continued with expenditure unchecked—;the costs would have fallen on industry, commerce and domestic ratepayers. It is a sobering thought that had manpower remained at its 1979 peak, those burdens would have been about £40 million greater than they are on the basis of that modest reduction of about 3·5 per cent.

Mr. Ron Davies: Will the Secretary of State give way?

Mr. Edwards: I shall give way in a moment.

Mr. Rowlands: Give way.

Mr. Edwards: I shall give way, but not because I am ordered to do so by the hon. Gentleman.

Mr. Davies: I do not wish to become involved in an obviously amicable discussion between the Secretary of State and my colleagues.
The Secretary of State has made great play of the reduction in education spending because of falling rolls. Does he agree that the opportunities offered by falling rolls should have been used to provide better education rather than the closure of schools and the sacking of teachers? The right hon. Gentleman referred to the difficulties in providing social services, especially because of the aging population—;

Mr. Deputy Speaker: Order. Interventions must be brief.

Mr. Davies: Yes, Mr. Deputy Speaker.
The right hon. Gentleman has made precious little mention of the other services provided by local authorities. Perhaps he will now mention the problems of housing, industrial development, transport—;

Mr. Deputy Speaker: Order. I suggest that the hon. Gentleman allows the Secretary of State to make his speech.

Mr. Edwards: No doubt the hon. Member for Caerphilly (Mr. Davies) will make his speech in due course.
The pupil-teacher ratio is now at its best ever level, and is much better than it was under the Labour Government. I referred to the fact that local authorities are increasing expenditure on social services above costs. If manpower alone had remained at its 1979 peak, an additional burden of £40 million would have been placed on those who must pay the rates and taxes that sustain local government.
It is an equally salutary thought, and an especially relevant introduction to the 1983–84 supplementary report, that had Welsh local authorities not recruited about 1,000 extra staff between March 1982 and March 1983, their expenditure would have been about £9 million less. Not only could that sum have been trimmed off Welsh rate burdens, but we would have been close to the point where the report that we are considering might not have been necessary.
The principal purpose of this report is to effect grant withholding from authorities whose budget plans exceed their individual targets for the current year, as well as to protect the grant entitlements of the 32 authorities whose planned expenditure is at or below target level. I had hoped that it would not have been necessary to take this action and that all authorities would meet their targets, but authorities' plans in aggregate show that budgeted total expenditure exceeds the rate support grant provision by more than £21 million, and I have told the local authorities that I cannot accept that level of overspending.
The majority of Welsh authorities have planned expenditure for the current year so as not to exceed their targets. Twenty nine of the 37 Welsh districts and three of the eight Welsh counties are in that position and have shown conclusively that what I asked of them was by no means unreasonable or impossible. By keeping within targets, they avoid not only grant withholding but the associated close ending adjustment. I shall explain the effect of this close ending adjustment.

Mr. Rowlands: That is another piece of jargon.

Mr. Edwards: It is another piece of jargon, but the hon. Gentleman, with his experience, will understand it.
Close ending adjustment, which is a phrase extremely familiar to those involved in local government, ensures that the grant paid out equals the amount of grant available, and legislation requires me initially to reduce the block grant of all authorities by a common proportion if grant claims exceed the amount available. That is the case this year, and all authorities have had their grant claims abated by about 1 per cent. It is only right and equitable that authorities meeting their targets should have the initial close ending reductions restored to them at the first opportunity., and that is what I am doing now. I know that those authorities will particularly welcome the fact that decisions are being taken early so that they can plan accordingly.
Possibly one of the most important aspects of achieving targets from the local authority viewpoint is that authorities that budget for expenditure at or below their target level then know within narrow limits the grant that they will receive and are able to plan their affairs with certainty.
While close ending is a consequence of the overall spending decisions of local government taken together, grant withholding is entirely a consequence of the individual performance of authorities. For an authority whose planned expenditure exceeds its target, the amount of grant to be withheld will, as in previous years, be directly related to the extent of its own excess and will in no way be affected by the expenditure decisions of other authorities. An authority's liability to grant holdback should be and is entirely dependent on decisions that it has taken itself in the full knowledge of the financial consequences. Every authority took its budget decisions aware of what would happen if it incurred expenditure in excess of its target. Authorities were notified of their targets last December and knew the amount of grant that would be withheld for particular levels of spending above those targets. Any authority that decided to budget for more than its target amount did so consciously, in the full knowledge of the grant consequences and— this is important—;the consequences for their ratepayers. I told the House and local authorities exactly what we intended. I warned them from the Dispatch Box that we meant what we said. It is against that background that we have to consider the consequences of this report.

Mr. Rowlands: In Merthyr Tydfil and Rhymney, the two local authorities that I represent, 32 councillors were elected in 1983 on the basis of their policies, views, attitudes and expenditure plans. Why has the right hon. Gentleman the right to override those decisions, schemes and arguments?

Mr. Edwards: I should have thought that the hon. Gentleman would understand that the Government are responsible for overall economic management. The Government provide the greater part of local authority finance—;which comes from the taxpayer, not from the local ratepayer—;and are acutely concerned about the effects of rating decisions on local industry, which pays the bulk of local rate burdens. For the hon. Gentleman to intervene when Merthyr Tydfil has the dubious distinction of registering the highest percentage increase in spending of all the Welsh authorities— 17 per cent. Between 1982–83 and 1983–84—;is remarkable.

Mr. Rowlands: We have some of the worst problems and we need to spend money on them.

Mr. Edwards: The Welsh local authorities are budgeting to overspend £21·1 million, which is 1·7 per cent. above the total public expenditure provision that we set. As I have told the House, most authorities, including many with problems at least comparable with those of Merthyr Tydfil and the other overspenders, complied with the target, but five counties and eight districts failed to do so. Therefore, it is the Government's intention to withhold a total of £12·6 million, but it is still open for any of those authorities to avoid withholding by adjusting their spending at this stage.
Authorities that decide to overspend will have to go to their ratepayers, draw from balances previously provided by their ratepayers, or use some combination of those two mechanisms to cover not only the excess expenditure that they are incurring but the amount of grant that will now be withheld. The position will vary from authority to authority, but in aggregate terms it means that overspending authorities have had to find from rates and/ or balances not just the £21·1 million overspend but the £12·6 million grant withholding. The £33·7 million involved is equivalent to about a 12p rate or about 7 per cent. of the average general rate poundage levied this year. In short, after making an allowance for the use of balances, rates in these local authority areas where targets have been exceeded could have been much lower than they are.
As I have made clear, local authorities have not had to act suddenly or unexpectedly. Most of them made provision and adjusted their balances accordingly in the expectation of grant withholding. If I failed to act when this was their response to our declaration of policy, not only would taxpayers and ratepayers suffer on this occasion, but local authorities would henceforward make their plans in the expectation that the Government did not mean what they said.
In addition to our responsibility to contain overall spending to a level which the country can afford, I consider that the Government and the House have an obligation to protect industry, commerce and ratepayers from the profligate policies of the small minority of irresponsible authorities. High spending demands high rates; high rates mean high costs; and high costs mean lost markets and lost job opportunities. We are not prepared to allow that to happen.
It cannot be argued that Government policies have led to large rate increases in Wales. The reverse is true. In the past two years average general poundages in the Principality have risen by about 4 per cent. only, and many authorities have managed to reduce their poundages in recent years. Without the overspending with which we are now dealing, rates could have been even lower. I believe that the lower rate increases we have seen in recent years have taken place only as a response by local authorities to Government policies. I am determined to see that the improvement continues in the period ahead.

Mr. Denzil Davies: The Secretary of State for Wales made a tired and cantankerous speech, much of it written, it seems, by junior Treasury officials. I do not blame the Secretary of State for being tired and cantankerous because he has nothing much to show for four years in the Welsh Office and little prospect of anything to show for a further four years if the Government continue their economic policies.
As the Secretary of State said, we are debating the 1981–82 report which does not throw up any substantial issues between us and the supplementary report for 1983–84 upon which I shall concentrate. I am sorry that the Secretary of State did not recognise that the 1983–84 supplementary report is highly damaging to a number of county and district councils in Wales. Under this centralist regime—;one which, as was pointed out, would make the Kremlin and the politburo drool at the mouth if they thought of such a system—;the Government will this year hold back £12·6 million from five county councils and seven district councils, many of which are in areas of high social deprivation and industrial and economic decline. For that reason, we see this document as mean and miserly, but well in keeping with the Government's economic policy and their increasingly futile attempts to control public expenditure and do something about unemployment.
Counties such as mid-Glamorgan, and districts such as the Rhymney valley in Gwent, Wrexham in Clwyd and Merthyr Tydfil, which are affected by the report, were long ago struggling, as the Secretary of State knows, with the social and economic consequences of those Victorian values which are apparently so beloved of the Prime Minister. In addition, those areas must cope with the Government's economic policy, the substantial increases in unemployment and consequent strain on their social and public services. The Secretary of State has insulted those areas tonight. The Government heap further insult and indignity upon them by denying them even a few extra resources—;£400,000 for Merthyr Tydfil—;not to expand their services, but to try to maintain their existing overstretched services.

Mr. Roy Hughes: My right hon. Friend heard the attack by the Secretary of State on Gwent county council. Will my right hon. Friend point out to the Secretary of State that Gwent's figures were drawn up with the wholehearted collaboration and agreement of Conservative members of the council?

Mr. Davies: I am sure that that is right. Many Conservatives on many councils, not just in Wales but, as we heard during the earlier debate, also in England, are appalled by the Government's attempt to achieve spurious control over local authorities. The figures are called targets but in fact they are ceilings. They are completely arbitrary. It is an attempt to reduce the amount of money that local authorities need.
Stripped of all its jargon, the report means fewer teachers, fewer children able to receive better education, fewer textbooks to be shared by children, roads falling into greater disrepair and fewer home helps to minister to the old, blind and disabled.

Mr. Keith Best: The right hon. Gentleman has not done his homework.

Mr. Davies: There is no point in the hon. Gentleman saying from a sedentary position that I have not done my homework. I know that he is an expert on this and, apparently, many other matters. I know that he does not like it, but I have explained what happens when money is taken from Welsh local authorities. The hon. Gentleman should not kid himself that things will be different.
We are told that this is just the beginning. The Secretary of State has not come clean with the House about this. What is the £12·6 million? Is it a contribution towards the £500 million-worth of panic cuts? I see that the Secretary of State shakes his head. That means that we will have the £12·6 million and the £6·5 million-worth of cuts in the National Health Service which were not announced in the House. The Government, whose large majority makes them arrogant, do not bother to come to the House to announce such matters. Will local authorities face further cuts to make up the Lawson £500 million? We deserve some answers. In what is possibly the last debate on Welsh matters before we rise for the summer recess, the Secretary of State should tell us whether the Government are thinking about additional cuts.

Mr. Nicholas Edwards: The £12·6 million is part of the expenditure provision and programme of targets announced a long time ago and has nothing to do with recent decisions. We are pursuing the normal consultative procedure with local government about local authority expenditure for the next financial year and those decisions have yet to be made.

Mr. Davies: Apparently, the £12·6 million has nothing to do with the Lawson £500 million. We can therefore expect a further Welsh contribution in addition to the £6·5 million Health Service cut. The Secretary of State for the Environment in the previous debate today said that he would announce next week the targets for England for 1984–85. When will the Secretary of State for Wales announce the figures for Wales? Will he give an undertaking that, whenever he does, they will be announced while the House is sitting?

Mr. Nicholas Edwards: I have only just met local authorities in the normal consultative process. I consider it right to study carefully a number of important points that they made. No decision has been taken.
I hope to announce the Welsh decision at about the same time as the English decision, but it would be quite wrong and would make a mockery of the consultative procedure if we met the local authorities after having made our decision. We have listened to the local authorities and are now considering the decision in the light of what they said.

Mr. Davies: Last Welsh Question Time the Secretary of State told us that there was close consultation between different Departments. The Secretary of State for the Environment said that he would announce the expenditure targets for England next week. Is the right hon. Gentleman saying that he will or will not announce the Welsh figures next week? I entirely accept that he may need time; I am not pushing him; I merely wish to know what the position is. But whenever he does this, will he make sure that the House is sitting?

Mr. Nicholas Edwards: It is important that local authorities should be told of our preliminary intentions, and that is what the decisions announced at this time are about. The formal announcements are not made until the autumn. Local authorities have especially asked that we give an early outline of the figures which the Government have in mind. We have listened to their representations. I hope to be able to make an announcement next week, because I am anxious to do so before hon. Members depart for the summer. I cannot be quite certain of the exact date, although it will be as soon as possible.

Mr. Davies: The right hon. Gentleman now says that he may announce this next week. I entirely accept that local authorities should be told, but given that the Government contribute most of the expenditure to local authorities and that the right hon. Gentleman is saying, "We are the paymasters now," he should announce his decision in this House. It is no good saying that he will tell local authorities. We have a right to know because, on the right hon. Gentleman's own argument, we are the paymasters.
From my experience, the public has paid a heavy price for the Tory party's paranoid obsession with local government. It would take an army of psychologists to define the true reasons for that obsession. I could go back beyond 1972, but I shall begin there a5 that was the year in which the Tories introduced the Local Government Act that created vast local authorities in many parts of England and Wales, many of which were bureaucratic and some of which were remote. Apparently we shall now have legislation in the autumn to abolish some of the local authorities that the present Secretary o f State for Energy in a different guise created in 1972.
The Government's obsession is not so much with structure, although that is again surfacing, as with the finance of local government. In four years in the last Parliament, there were three major pieces of legislation on local government finance, and apparently there will be another in the autumn to control rate increases.
Three reports are relevant to this debate—;150 pages of what can only be described as bureau-speak. There is the rate support grant report for 1983–84, which costs £4·20. There is the supplementary report for 1981–82 costing £3·15. The preamble to that report lists four other supplementary reports, all of which were issued between 1980 and 1982. In addition, there is the 1983–84 supplementary report, costing £3·60.
From 1970 onwards, the Tories seem to have had an extraordinary obsession with local government structure and finance. Whatever these reports and new structure have failed to do, they have created work in Whitehall. It is a veritable job creation scheme for top civil servants, and far exceeds anything that the Manpower Services Commission could possibly dream up. Armies of civil servants have copied reams of paper to other armies of civil servants circulating around Whitehall. Humourless statisticians have programmed countless computers, which have duly spewed out jargon and indecipherable algebraic equations.
At the end of the day, what is all this for? Apparently, it is to ensure that Cynon valley district council employs not 10 home helps but 6·666 recurring. We have holdbacks, drawbacks and cutbacks. In the previous debate, we even heard about fallbacks. Are we to have fallbacks in Wales as well? Apparently vie should all have heard about close-ending adjustments, as though people were born understanding such things. We have poundages and multipliers as well. Reading through the report, we see that the people of Powys are very lucky because their guidance-related multiplier is 0·970838. Indeed, they are luckier still, as their safety net multiplier is 0·936962. The hon. Member for Ynys Mon (Mr. Best) laughs. Clearly, he understands all about this.

Mr. Tom Hooson: Does the right hon. Gentleman agree that the safety net feature underlines the absurdity of some of the bureaucratic characteristics to

which he refers, as the present formula for allocation between districts and counties militates most unfairly against rural areas with sparse populations?

Mr. Davies: I knew that the hon. Gentleman understood all this. Since he has spent years at Conservative central office, one can well understand why he is such an expert on this gobbledegook. No doubt he was trying to make the point that the effective multiplier is 0·909638.
Apparently, all that simply means that this year the authority will not have to sack teachers, but who knows what will happen next year, even with the sparsity multiplier or whatever it is called? It is extremely unfair to subject local authorities to such minute control when the main items of their finance are totally outside their control. As the Secretary of State knows, they have no control at all over the percentage of grant which they receive from the Government. That percentage is determined, as it has been under previous Governments, either by bargaining between the Chief Secretary and the Secretary of State for the Environment, Scotland or Wales, as the case may be. If they cannot agree, the matter goes to the Cabinet and an arbitrary figure is determined according to the public expenditure survey and nothing else. Interest rates, which form a large item in local authorities' expenditure, are also totally outside their control. Now we have this nonsense of targets, which in effect are ceilings. That again is a totally arbitrary figure about which the local authorities have no say whatever.
On top of this completely arbitrary base, the Government come along with a pseudo-scientific framework of control which has little or no relevance to real life in the real world and the only object of which at the end of the day is to cut essential services to deprived areas.

Mr. Ian Grist: Does 'the right hon. Gentleman accept that when he was a Treasury Minister this country had to run to the International Monetary Fund and that one of the results was one of the most sal age cuts in capital spending by local authorities? Does he accept that we would have done better to cut some of the current spending and maintain the capital spending, but the policy of the Labour Government was to take the easy option and cut the capital spending of local authorities?

Mr. Davies: The hon. Gentleman is beginning to ape the tired old speeches of the Secretary of State. The answer is no, I do not accept what he says. None of those factors is within the control of local authorities. It is extremely unfair to impose this centralist bureaucracy upon them and to try to make them control matters which are outside their control.
The time has come when the Secretary of State should have the guts to appoint himself to run local authorities in Wales. He should stop hiding behind his computers, multipliers, poundages and close-ending adjustments, accept reality and become the gauleiter of local government in Wales. [HON. MEMBERS: "He is the gauleiter."] He is now in the extraordinary position of having power to control without responsibility for the consequences of that control.
As Rudyard Kipling said, we all know whose prerogative is the prerogative of power without responsibility. So let the right hon. Gentleman appoint himself the head gauleiter of local government in Wales.


He could appoint the Minister who is muttering and mumbling from a sedentary position as the mini-gauleiter for south Wales. He could appoint the Under-Secretary as the mini-gauleiter for north Wales. I know that the Secretary of State does not look like a gauleiter—; he does not even look like a mini-gauleiter— but underneath his charming bonhomie is a terrible determination to control local government in Wales with an iron fist. He wants to determine how many home helps there should be in the Rhymney valley, how many teachers in the Rhondda and how many books Powys county council should buy for its schoolchildren. The Government want control and power, but do not wish to accept responsiblity for the consequences.
This report—;there will be many more during the next two or three years— is a product of the Government's panic as they perceive that their economic policy is not working. The irony is that when the Government took office in 1979 they were determined to cut public expenditure. They said that it was the root of all evil in the British economy. But they have in fact presided over an increase in public expenditure as a percentage of the country's wealth. The Secretary of State is shaking his head, but there is no doubt that the Government's economic policies have reduced the country's wealth. As a result, unemployment has increased, as has public expenditure as a percentage of the national wealth.
The Government are despairing and want to cut public expenditure. Under the report they will cut the number of teachers and home helps. Tomorrow, they will no doubt cut the numbers of doctors and nurses. When that does not work, the unemployed will face the indignity of bearing the burden and paying the price for the unemployment heaped on them by the Government's economic policies. The Government's next action will be to cut the dole for the unemployed. That also will not work. They will dig a deeper and deeper pit for themselves during the next 18 months.
The Secretary of State should stop hectoring, hounding and lecturing Welsh local authorities. He should accept responsibility for the plight in which they find themselves. The right hon. Gentleman, sitting passively in the Cabinet, has been an abject apologist for the Government's economic policy during the past four years. That policy has caused the problems that face local authorities today.
The Western Mail, in an enlightened and imaginative editorial, put the point well a few days ago. The only problem was that it called for positive thinking, a phrase which causes difficulty for the Government. The article was a good critique of the Government's economic policy. It said:
Mrs. Thatcher's second administration is likely to offer the country's economy as cold a climate as did her first … But the signs are that not only will those jobs fail to rise out of the ashes, but that the unemployment which is caused by the present clean-out can reach such proportions that it can itself cause a new bout of inflation … At the present rate, the country's ability to produce real wealth sufficiently to support itself is being steadily diminished.
It is a pity that the newspaper did not write that editorial before the general election.
If the Secretary of State is so concerned about the problems of local authorities, where was he a few years ago when the Cabinet abolished exchange control, thereby

ensuring that the rate of interest paid by local authorities would have to rise? We read in the newspapers today that £25 billion has left the country and that the rush to invest abroad has become a stampede. The hon. Member for Cardiff, Central (Mr. Grist) looks puzzled. Perhaps he would like to ask a question.

Mr. Grist: Can the right hon. Member explain how, when we had exchange controls and he was a Treasury Minister, money was prevented from running out of the country and we were prevented from running into a financial crisis?

Mr. Davies: I should not have given way. That was a stupid question and I shall not waste time answering it.
When £25 billion is leaving the country, the Secretary of State comes to the House and makes a pompous, hectoring speech because poor old Dwyfor district council has overspent by £17,000. That is ridiculous.
Where was the Secretary of State back in 1980 when the Government smashed the economy by setting monetary targets which had nothing to do with prudent economic management, but everything to do with an antediluvian economic theology? Where was he during the last Budget, when £140 million was given back to the owners of capital? The right hon. Gentleman has come to the House today to penalise the poorest Welsh authorities to the tune of £12·5 million.
In the last four years the Secretary of State has presided over the greatest economic and social decline in Wales since the 1950s. According to the right hon. Gentleman's speech today, we shall get more of that cold comfort. The Secretary of State is attempting in the report to put Welsh local authorities in the dock and to penalise the least well off because of the Government's economic failure. The real guilt lies with the Secretary of State. The real guilt lies with the Cabinet. The real guilt lies with the Prime Minister and her crazy economic policies. By voting in the Lobby tonight, we shall make it clear where that guilt really lies.

Mr. Tom Hooson: The necessity for controlling public expenditure cannot seriously be questioned by anyone, except the right hon. Member for Llanelli (Mr. Davies). In the past four years we experienced great gains in manning efficiency in the private sector. In that period the record for achieving greater efficiency in the public sector was much less satisfactory. It is a tribute to my right hon. Friend the Secretary of State that in the Welsh Office manning was reduced by about 14 per cent. in that four years. In the same period the reduction achieved by Welsh local authorities was about 4 per cent., or 1 per cent. a year. That underlines clearly the gaps between good progress in the private sector, a lower achievement in central Government and very slow progress in local government.

Mr. Allan Rogers: Does the hon. Member accept the logic that local authorities reduced their staff by less because they provided vital services such as home helps, teachers and other fundamental front line services to the community, whereas in the Welsh Office it was easy to get rid of clerks and penpushers?

Mr. Hooson: I agree that there is a tension between the need to provide services and the demonstrable need, to control public expenditure. It is possible to achieve


considerable improvements in efficiency. To assume that that is not achieveable is to accept a counsel of despair. In the past 10 years employment by Welsh local authorities has increased by 75 per cent. No one in Wales can believe that services to the Welsh people have improved by 75 per cent.
I have no doubt that ratepayers want control of rate rises. It is something to say that in the past four years, while the retail price index increased by 55 per cent., the rate burden in Wales rose by 44 per cent. That is not as much progress as we should like, but it is, nevertheless, progress.
My right hon. Friend made a brief reference to the importance of ensuring that the rate burden does not deter industry, which it is vital to attract to Wales. Only last week, I met the Powys members of the CBI. When they went through the list of subjects wh ch were of great concern to them none was higher than the rate burden—;and that is in a county where the rate burden is fairly low. The worry in high spending authority areas hardly bears thinking about.

Dr. John Marek: If the hon. Gentleman is so worried about industry, will he support me in suggesting to his right hon. Friend the Secretary of State that local authorities seeking to attract industry to their areas should be allowed exempted expenditure, as the Secretary of State can do under section 8 of the 1982 Act?

Mr. Hooson: I am not sure that I would follow the hon. Gentleman in that direction. Those of us who served on the Select Committee on Welsh Affairs in the last Parliament noticed that there was an alarming tendency for a number of local authorities to get into destructive competition with one another. So I would not wish to be led in that direction, because it leads to another form of futile expenditure.
The right hon. Member for Llanelli made one or two derisory remarks about the jargon in these documents. I have a sneaking sympathy with him. I doubt whether there is a right hon. or hon. Member in the Chamber who could define several of the terms that we are debating. Of course, that is not entirely the fault of the people who produced the reports. The concepts themselves are difficult, the sums are formidable, and the balancing of factors on the multiple regression formula that is used for allocations between counties is intricate. There is much to be said for reducing the number of factors involved, but we cannot produce a totally simple world. Life is too complicated.
However, I agree with the right hon. Gentleman in criticising some features of the report. For instance, there are the quarterly reports of the manpower watch. That is intended as a helpful check on the trends in local government employment. I was puzzled to see the discrepancy in the last two quarters' figures for Powys county council. It seems to suggest that expenditure is grossly out of control. In fact, on consulting the financial data, one finds that the manpower figures are misleading. It appears that a part-time worker is courted on the same basis as a full-time worker, and the result is confusion.

Mr. Nicholas Edwards: When I met the local authorities last week I told them that an error had been made in the returns for the Powys authority. That error has been corrected, and the adjustment is, I think, about 100.

Mr. Hooson: I thank my right hon. Friend for that information. I obtained slightly different information earlier, and I am grateful for his correction.
Secondly, the confusion that arises from such intricate language and concepts naturally leads to errors such as the one to which my right hon. Friend referred. It was discovered that Brecknock district council had failed to meet the expenditure guidance because of an error in some of the financial data underpinning its target, and it is good to know that the sum arising from that will be disregarded for the purpose of rate support grant.
I shall refer briefly to another technical problem. I excuse my brevity on the ground that I am already on record on this matter. It is most unfair that the many factors that go into the multiple regression formula should include only one for sparsity when four of the Welsh counties are predominantly rural. A fair number of district councils are rural and there is no possible way in which the provision of services such as schools, roads and village halls in rural areas can compare with what is possible in more densely populated areas. I am told annually by my right hon. Friend that that problem is entirely in the hands of the associations of local authorities. I can only say that those hands are inert and I look to my right hon. Friend to take action in the coming year to start correcting that inadequate allowance for rural sparsity.

Mr. Roy Hughes: Having listened to the hon. Member for Brecon and Radnor (Mr. Hooson) on local government and heard the savage attacks that the Government have made repeatedly on local government, I find it difficult to believe that it was the 1970–74 Conservative Government who created this local government structure. Labour Members opposed that throughout and I have repeatedly done so over many years.
If it were not so serious for the people whom we represent, I would describe the Government's attack on local authority services and expenditure as being Alice-inWonderland economics. Take Gwent county council. In the current year 1983–84 Gwent has a grant-related expenditure assessment of £162·8 million. That is the Government's assessment of the money that Gwent needs to spend to provide a standard level of services. If it spends at exactly that level it will spend over its target figure of £160·2 million and it will incur penalties for overspending. What an absurdity— to spend at the level that the Government say is necessary and for that very level to be branded as overspending.
This year Gwent is budgeting to spend rather more than the grant-related expenditure level. It is budgeting to maintain the real standard of services and that inevitably means that it will fall out of the Government's policies. As I pointed out earlier, that is not a partisan decision designed to create confrontation with the Government. The budget was adopted unanimously with the support of the Conservatives on the county council. There was no opposition within the council, yet that budget, just 1·3 per cent. above the grant-related expenditure or 2·4 per cent. above the arbitrary figure laid down by the Government, brings Gwent into the penalty zone by £2·1 million. That £2·1 million is money taken away from the people of Gwent who have suffered much under the Government. It is money which they need and which will be lost to them.
Budgets never exactly match final expenditure figures. Last year in 1982–83 Gwent also budgeted to spend over


the Government's target. But when the books were closed at the end of the year it turned out that the final figure was just under the Government's target. The margin was less than £50,000 in a total budget of £150 million. It is a pity that private enterprise cannot work to such fine limits. Yet for that small figure the difference in grant was over £1 million. Indeed, £1 million of grant gained or lost would have been at stake against an overspend or underspend of as little as £1. That is the absurdity. The sum of £1 over the target means £1 million of grant lost. The sum of £1 under the target means £1 million of grants gained. Surely that was not the result intended when the present system of penalties was set up.
I find the penalty system objectionable in principle. We can accept the Government proposing a limit on the amount of grant they pay. We can argue about what that limit should be, but there is some sense in a maximum payment announced and understood. Local authorities can accept that if they go over the limit they will no longer gain extra grant help. It is wrong in principle that after the Government have announced their limit and have received approval from Parliament for that amount they should then reduce the declared grant because an elected local authority takes a democratic decision which is slightly higher than Whitehall or the Welsh Office thinks is needed or indeed the very level that the Welsh Office thinks is needed under its grant-related expenditure hat but higher than they think is right under its targets hat. Such a reduction in grant is an attack on the principle of democratic local government.
But the whole thing becomes utterly absurd when an overspend of just £1 could lead to the loss of £1 million of grant. The Secretary of State used technical terms such as holdback and close-ending but what essentially concerns people is the level of local government services in their communities.
What I am trying to describe is not the end of the story for as this crazy system of penalties presses down on the council other sectors of Government tell our local authorities to spend more. More must be spent under a Conservative Government on law and order. The new Criminal Justice Act allows the making of community service orders against 16-year-olds— more spending needed. New schemes of supervised activities are required for young offenders— more spending needed. With 38-tonne lorries on our roads it will cost more to maintain the roads and the bridges. Social needs are growing. More elderly people are living longer. We all welcome this, but more money must be spent by local authorities to meet those needs. Bus services are in danger of disappearing because the slump caused by the Government means that people no longer have jobs to travel to. People cannot afford to travel on buses when they have no jobs. More subsidies for buses are called for by local authorities. There are many other examples of extra needs but the Government are preventing those needs from being met by imposing their vicious system of targets and penalties.
The whole system of targets and penalties is wrong and with my colleagues on the Opposition Benches we shall be voting against them. On the assumption, as appears highly likely, that the reports are passed, I have a question of detail to ask the Secretary of State. On present budget plans, Gwent county council has incurred a £2.1 million penalty for 1983–84 because it plans to spend over the

target. If at the end of the year, by whatever means—;the council has decided unanimously not to seek cuts in services—;its final spending was below the target, could the penalty be removed?

Mr. Nicholas Edwards: I can answer the hon. Gentleman's question straight away. I said that if actual spending was reduced below target the local authority could remove itself from penalty.

Mr. Hughes: I assure the right hon. Gentleman that local authorities are not clear about the position. Perhaps this debate and his answer to my question will remove some remaining doubts. I was asking whether the penalty would be removed if authorities came within their assessed need to spend the grant-related expenditure, and the right hon. Gentleman said that the punishment would not be imposed on action or intentions alone.
For how long can the Government continue operating an Alice-in-Wonderland system by which councils can lose £1 million in grant for £1 overspending and can be penalised as overspenders for spending less than the Government say they need to spend? For how long can this nonsense go on before reason and common sense prevail? Even the Government must see sense eventually. Sadly, however, I fear the worst, for the Secretary of State for the Environment is said to be dreaming up even more stupid, though complicated, proposals— more of the crazy nonsense which is being inflicted on us tonight.

Sir Anthony Meyer: The two district councils, part of whose areas I have the honour to represent, appear to be good boys, according to the publications that we have had. In the absurdly short notice that we were given that this highly complicated debate would be held, I did not have time in which to consult them.

Mr. Donald Coleman: Is the hon. Gentleman aware that if it had not been for representations made by the Opposition, this debate would have come on much earlier, and in that event he would have had far less time in which to consult?

Sir Anthony Meyer: It would not have made much difference because, even in the four or five days I had, neither of them felt able to offer any constructive comments on the matter. I have no doubt that if I had consulted Clwyd county council, I should have been provided with a list of complaints as long as my arm. But if there is one common ground of thinking throughout my constituency it is that pretty well everything that emanates from Clwyd county council is likely to be foolish.
It seems that we are paying dear for the failure of the Government and their predecessors to grasp the nettle of rate reform. We are still trying to operate by tinkering with a machine that is no longer roadworthy. It has been fitted with so many adaptations, safety devices and fail-safe measures, with bits and pieces screwed on here and there—all in the pursuit of a passionate desire for what we like to call fairness but which is really a desire to ensure that someone else is not getting away with a bit more—;that the system has become totally unworkable.
Perhaps we should take a leaf out of the system in Red China, where they seem to have evolved a highly effective population policy. For one child one gets generous family allowance; for the second child one gets nothing extra; for


three children one loses the allowance for the first child; and for four children one is sent to prison, and that puts an end to it.
I sometimes think that we should consider applying equally drastic methods to the reform of local government finance, and the obvious drastic one would be to remove education and the police from the area of local government finance. I appreciate that there are one hundred and one objections to doing that. Nevertheless, the situation we are in is the most objectionable of all because we have the appearance of responsible local government without having the reality of it. It is no good the Opposition criticising my right hon. and hon. Friends for their failure to deal with local government finance when they were proposing to foist upon us an elected Welsh Assembly that would have had the power to spend money and no responsibility whatever for raising it. That would have been a recipe for catastrophe. To a lesser extent we are in the same position with local government finance, where the great bulk of the money is provided by the taxpayer and local electors elect representatives to run their local councils under the illusion that they are electing people who, in the true sense of the term, will be responsible for their actions. It is a thoroughly unhealthy situation and it is not being improved by all the tinkering that is taking place.

Mr. Geraint Howells: rose—;

Sir Anthony Meyer: No, I shall not give way because I intend to make a short speech. If I confine my remarks within a short speech there will be a greater chance that the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) will be able to catch the eye of the Chair, and that will enable me to listen to what he has to say. I have no doubt that I will find that more interesting than listening to his intervention in my few and feeble remarks.
I do not want to repeat the speech that delivered in the Chamber at about three o'clock this morning about how unhappy I am to see extensive cuts in the services provided by local authorities. I look forward to the day when we can have better services provided by local authorities—;smaller classes, more village schools and more home helps. I do not rejoice to see cuts in local authority services but I would rejoice to see the privatisation of many of the services that are now provided by local authorities. I only wish that more authorities in Wales would follow the advice of my hon. Friend the Member for Southend, East (Mr. Taylor), who is constantly urging authorities—;to privatise refuse collection. I believe that great economies could be effected by so doing. I repeat that I do not welcome cuts in local authority services, especially social services.
I have to support the Government when they say that, as they are providing the money for local authorities, there has to be some limit, and that they cannot continue making good the overspending of local authorities which believe that they can solve their problems, especially unemployment, by pouring out vast sums. If ever a tactic was self-defeating it was that one.
I agree so very much with what my hon. Friend the Member for Brecon and Radnor (Mr. Hooson) had to say about local authorities which believe that by spending large sums they can improve employment prospects in their areas. Some local councillors go off on expensive

missions to Japan to try to get a factory built in their area rather than in the adjacent one, which is likewise sending a mission to Korea for a similar purpose. Madness lies in that direction. The end result is that rates have to be increased to cover the expenditure that is involved. If the rates increase, the very industry that the authorities sought to attract is frightened away.
Unhappy as I am with the system of local government finance and convinced as I am that it must be changed—;the sooner we change it the better so that less tinkering is needed—;I see no alternative for the time being but to support my right hon. and hon. Friends. In the last resort they have to keep a tight control over public expenditure. As the bulk of the expenditure of local authorities is funded by the taxpayer, they have no alternative but to do so.

Mr. Geraint Howells: The debate is important for those of us who care for the young, the needy and the elderly in society. Many of us are afraid that tonight's proposed cuts will have an adverse effect on those who live in our community and I am pleased that you have called me, Mr. Deputy Speaker, to say a few words in this important debate.
The Government's record on local government has been appalling. Not content with disrupting the system in the early 1970s and creating additional and, in some instances, unnecessary tiers of government to confuse the long-suffering public, the Government are now imposing sanctions on those authorities and taking away their independence.
Local authorities in my part of Wales have made tremendous efforts in the past few years to stay within their budgets while providing adequate services for the community. I am sure that many local authorities have found that difficult. However hard they try, the Secretary of State keeps coming back with more and more savage cuts, threatening penalties for those authorities that overstep the mark. As a result, local services are deteriorating rapidly. Schools are finding it impossible to get enough books and equipment, nursery education is having to be eliminated in many areas because of lack of resources and school buildings are inadequate and there is no provision for new ones. I should be interested to hear the Secretary of State say when a school was last built in Ceredigion and Pembroke, North. I leave it to him to break that news.
Social services are also suffering badly. The old and the infirm are having to bear the cost of the cuts. I have received many letters from constituents who need hell) in the home to keep them out of institutional care. I am sure that many other hon. Members have received such Letters. Nevertheless, the hours of home help provided are being severely cut through lack of money. The elderly have given the best part of their working lives to the community, yet the Government are not willing to spend money to look after them in their retirement. That is a disgrace.
In assessing the needs of local authorities, the Government do not take sufficient account of special conditions in rural areas such as the sparsity of population, low average earnings and the high proportion of older people who retire to such areas. Their social needs are considerable. Nor do the Government take into account the


stringent measures that local authorities apply to their spending in a constant effort to achieve the low targets that are set for them.
How can the Secretary of State defend a system of local government expenditure control which imposes severe grant penalties on authorities that have spending levels which are higher than the target that is set by him when that target bears little relation to the Welsh Office's grant-related expenditure assessment of the authority's spending need?
In my constituency, Ceredigion district council is experiencing considerable difficulty meeting expenditure targets that have been set by the Secretary of State which, for 1983–84, is only 75 per cent. of the GREA. However, it has one of the lowest district council rate levies in Wales. It feels that, although it has behaved with the utmost care and has applied "Cardi" thrift to all of its financial affairs, it is still being penalised.
I do not want to play with words. I hope that when the Secretary of State winds up the debate he will tell the people of Wales whether there will be any more cuts in local services for the elderly and the young. What effect will such cuts have on employment prospects for the young, and how many more people will be made redundant by them? What effect will such cuts have on the police force and policing? What effect will they have on the morale of the staff and councillors who are responsible for local authorities in Wales?

Dr. John Marek: The constituency that I represent is within the borough of Wrexham Maelor, and forms a major part of that district. If the 1983–84 supplementary report is approved tonight, the grant holdback for the Wrexham Maelor borough council will be more than £447,000. That is the largest grant holdback of all the Welsh districts.
During the previous debate the Secretary of State for the Environment said that he had introduced such measures for England because he wanted to curb the few overspending authorities. I take it that the Welsh measures have been introduced for the same reason. I should like to compare the total expenditure of Wrexham Maelor borough council with that of other councils, and to compare it with what it should be under GREA. The table in the report shows that Wrexham council is spending less than the grant-related expenditure assessment. We all know that that assessment is an amount that the Welsh Office agrees with the local authorities. It provides for a standard level of service for every authority. Therefore, I do not see how it can possibly be said that Wrexham Maelor borough council is an overspending authority. However, in the supplementary report it will be penalised more than any other Welsh district. It is quite wrong for the Government, who are intent on punishing overspenders, to punish authorities that underspend.
The hon. Member for Clwyd, North-West (Sir A. Meyer) has unfortunately left the Chamber for the moment, but I agreed with several of his comments. However, I did not quite agree with his intention to vote with the Government this time because some authorities had overspent. It is a pity that he is not in the Chamber,

because this report punishes authorities that are spending less than the GREA and are, indeed, underspending. It is ironic that underspending authorities should be punished.
The problem could be looked at differently. One could compare the rate now with what it was not in 1976, 1973 or 1968 but in 1978. The rate now is 26p in the pound. In 1978, five years ago, it was 23p. I could be said that that was a 13 per cent. increase, but we must be a little careful as the grants were reallocated in that year. The calculation must be made properly. If the redistribution is taken into account, the rise in the rate has been about 52 per cent., which compares with a rise in the retail price index of 63 per cent.
It is easy for the Secretary of State for Wales to bandy figures around about certain things going up by five or 12, but we can bandy other figures around. It is clear that in the past five years at least the rate set by the Wrexham Maelor borough council has risen by about 11 per cent. less than the RPI. It must also be remembered that rate support grant has fallen in real terms. Two years ago, it was 73·4 per cent., but it has now fallen to 70·4 per cent. of relevant expenditure. That reinforces the argument.
In addition, there is the argument that local authorities have been saddled with extra tasks without being compensated for them, or with with very little compensation. For example, housing benefits have to be administered. That is an enormous task. Any hon. Member with experience of local authorities will realise that that has put local authorities under a great strain. They can hardly cope with it. Charges for planning applications have been introduced, which hardly pay for themselves. There is also the administration of direct labour organisations. Local authorities have been involved in enormous extra costs and have gained very little in return. Which Government Department has done any better? I do not believe that there is one Department that has done better than the local authorities. In general, it is local government that has shouldered its responsibilities and acted prudently and it is the Government, who are always trying to control expenditure and who are always telling others to control theirs, who never control their own under the limits that they set. There is only a finite number of shares in British Petroleum for the Government to sell to finance their so-called overspending. They will run out eventually and will have to think of a new strategy. Disgraceful acts such as selling the nation's assets are another story, but there is a limit to what they can do here.
We are concerned with the iniquity of an underspending authority suffering the highest grant holdback of all Welsh authorities. Table 5.2 on page 31 of the report shows the grant holdback, and I compare the district councils of Wrexham Maelor and Merthyr Tydfil. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) is not here now, but I am sure that he will be interested to read my remarks in Hansard. The total expenditure of Merthyr Tydfil was £6·5 million. There was no disregarded expenditure, so the adjusted expenditure is £6·5 million. The GREA for Merthyr Tydfil is £5·8 million, so that council is spending £752,000 more than its GREA. Its holdback will be £438,000.
The total expenditure for Wrexham Maelor is £8·3 million, with no disregarded expenditure, so the adjusted expenditure is £8·3 million. Its grant-related expenditure is £8·5 million, so it is spending about £200,000 less than its GREA. To use the Government's phrase, it is an underspending authority. It is not spending as much as it


should to provide an appropriate standard of service. Yet, according to the Government, it has overspent by £597,000, and its grant holdback is £447,000. That is more than Merthyr Tydfil's holdback. Where is the justice in that? Why is an authority that spent less than its GREA being penalised more than an authority such as Merthyr, which spends above the GREA? However, it is scant comfort to my hon. Friend the Member for Merthyr Tydfil and Rhymney, because authorities should not be penalised at all.
It is too late to do anything about this matter in 1983–84, but perhaps the Secretary of State will consider whether authorities spending less than GRE can be excluded from penalties. If he cannot do that immediately, I would welcome an assurance that he will do it within the next two or three years. I welcome the fact that, in constructing the current expenditure component of targets, the weighting given to the GRE element has been increased from 50 per cent. to 60 per cent., and I wish it to be raised higher.
A further iniquity is that the Government have not exempted from holdback money spent on employment generation schemes. I said earlier in art intervention that the Secretary of State has power to do that under section 8 of the Local Government Finance Act 1982, and I ask him to reconsider the matter. There is nothing wrong with competition, and it was strange to hear the hon. Member for Brecon and Radnor (Mr. Hooson) say that we cannot do that because it would involve too much competition. The Secretary of State should be able to select the expenditure to be disregarded.
The money spent by county councils to support Manpower Services Commission schemes is provided mainly to regenerate private industry, and to provide real jobs. The Government have said much about real jobs. If the Minister is serious, will he reconsider representations from the local authorities—;if they have not made any, which I doubt, they should do so now—;that an appropriate exemption be made in the next supplementary report?
Another aspect of the Welsh RSG supplementary report is how GRE is determined. Two hon. Members have referred to this, and I cannot help feeling that counties such as Clwyd, which are split in two—;the eastern side is industrial and the western side is rural and residential—;lose out in the needs indicators because those do not take sufficient account of the different types of settled population. They do not provide the extra resources necessary to provide different services for the two different life patterns in Clwyd.
It would be foolish to go into detail at this stage, so I shall leave it at that, except for a small item of demographic change. Appendix 3 of the 1983–84 report says in paragraph 3:
The adjustment has been effected by reducing the GRE of each authority which has had a net loss of population".
That is quite clear; but the report goes on to say:
The GRE of authorities which have had a net gain in population has been increased by the amount lost by the appropriate donor authority or authorities.
That is not clear. What if the donor authority cannot be ascertained, or if it is in England? Is it clear that if there is an increase in population regardless of whether we can find out where the donor authority is the relevant changes will be made in the GRE?
The borough of Wrexham had a temporary dip in population growth two years ago and I hope that when the

Minister constructs the needs indices he will smooth out this dip and make allowances for the generally increasing population in this part of Clwyd. Clwyd county council spends more than its GRE, and some of my points do not apply to it while others do. It has kept its rate precept steady for three years and has acted responsibly in trying to protect services while keeping costs down. The Wrexham Evening Leader, which is an objective paper that does not represent the views of revolutionary Marxists or Right-wing monetarists, said this about the Clwyd rate support grant in its leader:
Clwyd County Council knew, of course, that it w as to lose a hefty slice of rate support grant as a penalty for overspending.
What it had hoped was that the Secretary of State for Wales would not invoke the maximum penalties, and it is particularly annoyed that the Treasury should claw back cash earmarked for urban aid and Manpower Services Commission schemes, which appears particularly cruel in an area struggling to cope with massive unemployment.
For, with the possible exception of the Lowther College venture, no-one can accuse the council of not trying to get its priorities right and its expenses down. It has, after all, held its rate steady for the last three years, and the Welsh Office might have expressed just a shade more practical sympathy for its particular needs and problems.
We spent three or four hours discussing English rate support grants, and the Welsh rate support grants are just as important as those.
The opinion voiced in the Clwyd county council has been the same as the opinion voiced in the council chamber of every council in north and mid-Wales. I was a member of a council in the constituency of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) and not only did the Labour members of that council condemn the Government's policy, but so did the Liberals, the Welsh nationalists and, most telling of all, the Tory members. The Government have lost the support of their thinking members on this issue.
I urge the Secretary of State for Wales to speak up for Wales and for local authorities in Wales. If the Government insist on continuing along this road, the logical conclusion will be the abolition of local authorities completely and direct rule from Cardiff, which is a long way from mid-Wales and north Wales, by civil servants and Ministers fiddling around with figures on a map. The report takes us a step further to such rule. Therefore, I hope that it is soundly defeated tonight.

Mr. Donald Coleman: The apparent cry of Ministers of this Administration and the one previously formed by the Prime Minister whenever we challenged them on the problems affecting constituents and others has been "We are not responsible". They have continually referred us to other bodies to resolve the problems that we have raised with them. That has never been more evident than in matters affecting local government. Time and again we have been told by Ministers that this area or that is the responsibility of local councillors, that they are free to make decisions on such matters and that the Government will not interfere. The Government's behaviour over the rate support grant and the supplementary report for 1983–84 shows the falseness of the posture of Ministers.
The supplementary report implements the threat contained in the main report published on 20 December 1982, which announced the Government's intention to


apply penalties to authorities that overspent the targets set for them, not by the local authorities but by this non-interfering Government.
As has been said during the debate, the aggregate clawback will be £12·6 million. Local authorities were spending this amount. The Welsh local authorities expected this arrangement because they are sensible and responsible. It means that the Welsh economy will suffer a direct loss. Those who rub their hands with glee at this punishment of what they regard as spendthrift councils should remember that this is occurring when there is an ever-increasing level of unemployment. They should curb their enjoyment at this measure and face the fact that the cuts in public expenditure of £500 million which were recently announced by the Chancellor of the Exchequer will be in addition to what the Secretary of State is doing in this measure. This will cause a further loss to the Welsh community as it faces a growing unemployment problem.
The Government's penal action is being taken against local authorities because of a marginal excess on the Government's expenditure target. This excess expenditure is incurred at ratepayers' expense and does not increase the amount that the Government are meeting through grants from the Exchequer. The Government can retaliate by reducing the grant and increasing the costs to the local ratepayer.
Of the Welsh counties most affected by the Secretary of State's penalty imposition, mid-Glamorgan and west Glamorgan seem to suffer most. Mid-Glamorgan is at the head of the overspending penalty league. The Secretary of State should know that that county faces exceptional problems. It inherited social conditions and problems which have been aggravated by traditionally high unemployment that in recent years has accelerated. The Secretary of State will remember the arguments advanced during his first Parliament by the then Labour spokesman on Welsh affairs, who is in another place, during the passage of the Conservative party's legislation to reform Welsh local government. Those arguments drew attention to the problems which have dogged mid-Glamorgan since then.
Against a background of adverse social conditions, after months of consideration the county council decided that, rather than make cuts in the 1983–84 budget, it would be necessary to include some limited growth of about £3·5 million in the budget to deal with some of the problems. This is less than 1·75 per cent. of the total budget. Let me itemise this expenditure. First, additional teachers for primary schools; teachers for 16 to 18-year-olds—greatly affected by the depression—;and to assist underachievers. Secondly, restoration of earlier cuts in books and equipment for schools. Thirdly, the opening of a new technology information centre. Fourthly, part restoration of earlier cuts in street lighting and maintenance. We must not forget that last year mid-Glamorgan was affected badly by the snow that damaged many of its roads. Fifthly, an increase in the number of social workers and home helps to provide services for those in need. Where do we find the case of those who accuse the county council of being spendthrift? Rightly or wrongly, and I believe rightly, the county council has judged that it is in a better position to assess what needs to be done than the Secretary of State or his staff at Cathays Park.
West Glamorgan is awarded the lowest assessment of grant-related expenditure per head for Welsh counties—;4·5 per cent. below average. West Glamorgan's population, in proportion to Wales as a whole, justifies GRE £6 million higher than the assessment. That simple adjustment to GRE would transform the counties' grant entitlement within the complex system of thresholds, grant-related poundages, multipliers and targets. Although I accept that the approach to spending needs cannot be based solely on population figures, it is, nevertheless, instructive to compare each county's GRE on that basis. It will show that the biggest sufferers with west Glamorgan are the neighbouring counties in the southern industrial belt including mid-Glamorgan. The conclusion must be that the system is biased in favour of the more rural counties. West Glamorgan suffers from urban deprivation and rural isolation, which work against the county.
The public transport subsidy has affected west Glamorgan. The county council was persuaded by my right hon. and hon. Friends and myself to assist with the cost of public transport in the county. We met the county council with representatives of management and trade unions in the transport industry to urge that the county make a greater contribution towards public transport. We were worried about the problems of the rural part of the county. West Glamorgan's response was in marked contrast to that of Dyfed. Similar pleas there, as I read in the South Wales Evening Post, have met with a blank refusal from the county council. The public will have to put up with a worsening public transport system. Dyfed county council is among the good boys in the Secretary of State's punishment book.
The Government are taking more control over the way that democratically elected councils conduct their affairs. The increasing interference is a threat to the survival of local government in its present form, and that is why I invite the House to join my right hon. and hon. Friends in the Lobby to oppose the report.

Mr. Nicholas Edwards: The hon. Member for Neath (Mr. Coleman) spoke about people rubbing their hands in glee. I assure him that there is no question of that. I had hoped that we would not have to use the penalty system. As I pointed out to the hon. Member for Newport, East (Mr. Hughes), it is still possible for local authorities to reduce their expenditure and avoid penalty.
The hon. Member for Neath spoke about mid-Glamorgan. He will recall that at the outset the leader of the mid-Glamorgan authority made it clear that the authority intended to ignore the Government's position on this matter. He challenged me publicly and said that he did not believe that in an election year we would dare to use penalties. I made the position perfectly clear from the Dispatch Box and stated that we would not hesitate to impose the penalties if local authorities went ahead as they had said they would.
The hon. Gentleman spoke about the relationship between GRE and targets. In west Glamorgan the target is well above GRE—;7½ per cent.—;and that is the only county which spends above the 10 per cent. Threshold above GRE. It has high spending in relation to GRE—;

It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Motion relating to Members' Salaries and the Motion relating to Car Mileage Allowance may be proceeded with, though opposed, until any hour.—;[Mr. Garel-Jones.]

Rate Support Grant (Wales)

Question again proposed.

Mr. Edwards: At the outset of the debate, the right hon. Member for Llanelli (Mr. Davies) accused us of introducing a centralised regime and criticised us more than once for controlling public spending. That was not the kind of argument that he used to advance from the Dispatch Box when speaking as a junior Treasury Minister.
The right hon. Gentleman asked when I would announce our provisional decision on next year's local authority expenditure. As I told him in an intervention, I hope to do so next week, but when I met the local authorities a few days ago I undertook to consider their representations closely. We have not yet taken final decisions, but it would be wrong to keep them in uncertainty and to delay announcing these provisional decisions because the House has risen for the summer recess. There are plenty of precedents for making announcements of this kind at this time of year.
The right hon. Gentleman said that the complicated system with which we are involved was job creation for civil servants. However complex it may be, the Government have succeeded in reducing their manpower over the last four years—;the Welsh Office by about 15 per cent.—;whereas local authorities have reduced theirs by only about 3½ per cent. Everyone knows the absurdity of the proposition that there is no room for improved efficiency. People in the private sector and many in the public sector have shown that it is po3sible to maintain services and to reduce manpower. That point was rightly made by my hon. Friend the Member for Brecon and Radnor (Mr. Hooson).
My hon. Friend and the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) spoke of the inadequate provision for sparsity and the poor treatment of rural areas, but the hon. Member for Neath took the view that there was overprovision for the rural areas and that the industrial areas had been hard done by. I suspect that this is some evidence that the formula arrived at by the local authority working party in consultation with the Welsh Office was sensible.
I forecast that we would hear complaints about savage cuts, and we heard them from the hon. Member for Newport, East. He wanted to know whether, if his local authority got within its target, it would avoid penalty. It will, but the hon. Gentleman really asked whether getting below GRE would mean that it avoided penalty. I must make it perfectly clear that that is not so. Indeed, if the local authority spends above target, it will not benefit from the close-ending provisions about which I spoke in my opening remarks. That is why a relatively small overspend on target can involve a reduction of grant, because the overspend falls on those authorities above target while those below target are exempt.
The hon. Members for Newport, East, Ceredigion and Pembroke, North and Wrexham (Dr. Marek) asked why there was no exemption from grant penalties for authorities

whose expenditure was below GRE. Many authorities provide a standard of service satisfactory to their electors when spending below GRE. Indeed, before the GRE system was introduced they never questioned whether the level of spending was reasonable. It was simply what they thought right for their areas. I do not think that it would be possible, except at the expense of seeking unrealistic expenditure reductions from other authorities, to allow such authorities disproportionately to increase expenditure. Authorities spending below GRE, however, unlike the high spenders above the GRE, receive the maximum cash input and are thus in a position to allow a modest growth in expenditure.
The hon. Member for Wrexham suggested that certain alterations should be made in the target system. When I asked the local authorities about this last week, however, they made it plain that they did not wish to operate targets at all but that if targets had to be operated the existing formula should be retained and not altered. I was prepared to consider alterations, but the authorities' answer to the specific question was quite clear.
My hon. Friend the Member for Clwyd, NorthWest (Sir A. Meyer) said that we had failed to grasp the nettle of rate reform. That is fair enough, but I note that he did not suggest any alternative system. As he knows, that is the problem that has dogged successive Governments. Nevertheless, he was absolutely right in saying that the bulk of the money for local government comes from the taxpayers and that there must be some limit. We are setting a limit and seeking to ensure that it is maintained.
The hon. Member for Cerdigion and Pembroke, North asked about provision for the elderly and the young. Those decisions are for local authorities to take within the total expenditure provision for local government. It is accepted that there will be increased expenditure on the police, but that will be offset in areas such as education where pupil numbers are falling and expenditure can be reduced. Local authorities will not, however, be penalised for the recent police pay award. Future rate support grant reports will allow for that increase.
The hon. Gentleman referred to employment prospects for the young. As I have said, employment prospects depend crucially on lowering costs, keeping interest rates down and reducing the rate burden. That is one of the principal objectives of the report before the House, and that is why I ask the House to support it.

Question put and agreed to.

Resolved,
That the Welsh Rate Support Grant Supplementary (No. 3) Report 1981/82 (House of Commons Paper No. 12), which was laid before this House on 7th July, be approved.

Question put,
That the Welsh Rate Support Grant Supplementary Report 1983/84 (House of Commons Paper No. 11), which was laid before this House on 7th July, be approved.—;[Mr. Nicholas Edwards.]

The House divided: Ayes 288, Noes 171.

Division No. 42]
[10.8 pm


AYES


Aitken, Jonathan
Baker, Nicholas (N Dorset)


Alexander, Richard
Baldry, Anthony


Alison, Rt Hon Michael
Batiste, Spencer


Amess, David
Beaumont-Dark, Anthony


Arnold, Tom
Bellingham, Henry


Ashby, David
Bendall, Vivian


Aspinwall, Jack
Bennett, Sir Frederic (T'bay)


Atkins, Rt Hon Sir H.
Benyon, William


Atkins, Robert (South Ribble)
Berry, Sir Anthony






Best, Keith
Hamilton, Neil (Tatton)


Bevan, David Gilroy
Hampson, Dr Keith


Biffen, Rt Hon John
Hanley, Jeremy


Biggs-Davison, Sir John
Hargreaves, Kenneth


Blackburn, John
Harris, David


Body, Richard
Harvey, Robert


Bonsor, Sir Nicholas
Haselhurst, Alan


Boscawen, Hon Robert
Havers, Rt Hon Sir Michael


Bottomley, Peter
Hawkins, Sir Paul (SW N'folk)


Bowden, Gerald (Dulwich)
Hawksley, Warren


Boyson, Dr Rhodes
Hayhoe, Barney


Braine, Sir Bernard
Hayward, Robert


Brandon-Bravo, Martin
Heddle, John


Bright, Graham
Henderson, Barry


Brinton, Tim
Heseltine, Rt Hon Michael


Brown, M. (Brigg &amp; Cl'thpes)
Hickmet, Richard


Bruinvels, Peter
Higgins, Rt Hon Terence L.


Bryan, Sir Paul
Hill, James


Budgen, Nick
Hirst, Michael


Burt, Alistair
Holland, Sir Philip (Gedling)


Butterfill, John
Holt, Richard


Carlisle, John (N Luton)
Hooson, Tom


Carlisle, Kenneth (Lincoln)
Howard, Michael


Carttiss, Michael
Howarth, Alan (Stratf'd-on-A)


Chalker, Mrs Lynda
Howarth, Gerald (Cannock)


Channon, Rt Hon Paul
Howell, Rt Hon D. (G'ldford)


Chapman, Sydney
Howell, Ralph (N Norfolk)


Chope, Christopher
Hubbard-Miles, Peter


Clark, Hon A. (Plym'th S'n)
Hunt, David (Wirral)


Clark, Dr Michael (Rochford)
Hunt, John (Ravensbourne)


Clark, Sir W. (Croydon S)
Hunter, Andrew


Clarke Kenneth (Rushcliffe)
Jenkin, Rt Hon Patrick


Clegg, Sir Walter
Jessel, Toby


Cockeram, Eric
Jones, Gwilym (Cardiff N)


Colvin, Michael
Jones, Robert (W Herts)


Conway, Derek
Joseph, Rt Hon Sir Keith


Coombs, Simon
Kellett-Bowman, Mrs Elaine


Cope, John
Kershaw, Sir Anthony


Cormack, Patrick
Key, Robert


Couchman, James
Kilfedder, James A.


Cranborne, Viscount
King, Roger (B'ham N'field)


Crouch, David
King, Rt Hon Tom


Currie, Mrs Edwina
Knight, Gregory (Derby N)


Dickens, Geoffrey
Knowles, Michael


Dicks, T.
Knox, David


Dorrell, Stephen
Lang, Ian


Douglas-Hamilton, Lord J.
Latham, Michael


Dover, Denshore
Lawler, Geoffrey


du Cann, Rt Hon Edward
Lawrence, Ivan


Dunn, Robert
Lawson, Rt Hon Nigel


Durant, Tony
Lee, John (Pendle)


Dykes, Hugh
Leigh, Edward (Gainsbor'gh)


Edwards, Rt Hon N. (P'broke)
Lennox-Boyd, Hon Mark


Eggar, Tim
Lester, Jim


Evennett, David
Lewis, Sir Kenneth (Stamf'd)


Eyre, Reginald
Lightbown, David


Fallon, Michael
Lloyd, Ian (Havant)


Farr, John
Lloyd, Peter, (Fareham)


Favell, Anthony
Lord, Michael


Fookes, Miss Janet
Lyell, Nicholas


Forsyth, Michael (Stirling)
McCrindle, Robert


Forth, Eric
McCurley, Mrs Anna


Franks, Cecil
Macfarlane, Neil


Fraser, Rt Hon Sir Hugh
MacKay, Andrew (Berkshire)


Fraser, Peter (Angus East)
MacKay, John (Argyll &amp; Bute)


Fry, Peter
Macmillan, Rt Hon M.


Gale, Roger
McNair-Wilson, P. (New F'st)


Galley, Roy
McQuarrie, Albert


Goodlad, Alastair
Madel, David


Gow, Ian
Major, John


Gower, Sir Raymond
Malins, Humfrey


Grant, Sir Anthony
Malone, Gerald


Greenway, Harry
Maples, John


Gregory, Conal
Marland, Paul


Griffiths, E. (B'y St Edm'ds)
Marlow, Antony


Griffiths, Peter (Portsm'th N)
Marshall, Michael (Arundel)


Grist, Ian
Mates, Michael


Ground, Patrick
Mather, Carol


Gummer, John Selwyn
Maude, Francis


Hamilton, Hon A. (Epsom)
Maxwell-Hyslop, Robin





Mayhew, Sir Patrick
St. John-Stevas, Rt Hon N.


Mellor, David
Sayeed, Jonathan


Merchant, Piers
Shaw, Giles (Pudsey)


Meyer, Sir Anthony
Shaw, Sir Michael (Scarb')


Miller, Hal (B'grove)
Shelton, William (Streatham)


Mills, Iain (Meriden)
Shepherd, Colin (Hereford)


Mills, Sir Peter (West Devon)
Silvester, Fred


Mitchell, David (NW Hants)
Sims, Roger


Moate, Roger
Skeet, T. H. H.


Morris, M. (N'hampton, S)
Smith, Tim (Beaconsfield)


Morrison, Hon C. (Devizes)
Soames, Hon Nicholas


Morrison, Hon P. (Chester)
Spence, John


Moynihan, Hon C.
Spencer, D.


Mudd, David
Spicer, Michael (S Worcs)


Murphy, Christopher
Squire, Robin


Neale, Gerrard
Stanbrook, Ivor


Needham, Richard
Stern, Michael


Neubert, Michael
Stevens, Lewis (Nuneaton)


Newton, Tony
Stewart, Allan (Eastwood)


Nicholls, Patrick
Stokes, John


Normanton, Tom
Stradling Thomas, J.


Norris, Steven
Tebbit, Rt Hon Norman


Onslow, Cranley
Terlezki, Stefan


Osborn, Sir John
Thatcher, Rt Hon Mrs M.


Ottaway, Richard
Thompson, Donald (Calder V)


Page, John (Harrow W)
Thompson, Patrick (N'ich N)


Page, Richard (Herts SW)
Thornton, Malcolm


Parris, Matthew
Townend, John (Bridlington)


Patten, John (Oxford)
Tracey, Richard


Pattie, Geoffrey
Trippier, David


Pawsey, James
Vaughan, Dr Gerard


Peacock, Mrs Elizabeth
Waddington, David


Percival, Rt Hon Sir Ian
Wakeham, Rt Hon John


Pink, R. Bonner
Waldegrave, Hon William


Pollock, Alexander
Walker, Bill (T'side N)


Powley, John
Waller, Gary


Prentice, Rt Hon Reg
Ward, John


Price, Sir David
Wardle, C. (Bexhill)


Raffan, Keith
Warren, Kenneth


Rhodes James, Robert
Wells, Bowen (Hertford)


Rhys Williams, Sir Brandon
Wheeler, John


Ridley, Rt Hon Nicholas
Wilkinson, John


Ridsdale, Sir Julian
Winterton, Mrs Ann


Rippon, Rt Hon Geoffrey
Winterton, Nicholas


Robinson, Mark (N'port W)
Wolfson, Mark


Roe, Mrs Marion
Wood, Timothy


Rossi, Sir Hugh
Young, Sir George (Acton)


Rowe, Andrew
Younger, Rt Hon George


Rumbold, Mrs Angela



Ryder, Richard
Tellers for the Ayes:


Sackville, Hon Thomas
Mr. Tristan Garel-Jones and


Sainsbury, Hon Timothy
Mr. Douglas Hogg.


NOES


Abse, Leo
Bruce, Malcolm


Alton, David
Buchan, Norman


Anderson, Donald
Caborn, Richard


Archer, Rt Hon Peter
Callaghan, Rt Hon J.


Ashdown, Paddy
Callaghan, Jim (Heyw'd &amp; M)


Ashley, Rt Hon Jack
Campbell, Ian


Ashton, Joe
Carlisle, Alexander (Montg'y)


Atkinson, N. (Tottenham)
Clark, Dr David (S Shields)


Bagier, Gordon A. T.
Clarke, Thomas


Banks, Tony (Newham NW)
Clay, Robert


Barnett, Guy
Cocks, Rt Hon M. (Bristol S.)


Barron, Kevin
Cohen, Harry


Beckett, Mrs Margaret
Coleman, Donald


Beith, A. J.
Concannon, Rt Hon J. D.


Bell, Stuart
Conlan, Bernard


Bennett, A. (Dent'n &amp; Red'sh)
Cook, Robin F. (Livingston)


Bermingham, Gerald
Corbett, Robin


Bidwell, Sydney
Corbyn, Jeremy


Blair, Anthony
Cowans, Harry


Boothroyd, Miss Betty
Craigen, J. M.


Boyes, Roland
Dalyell, Tam


Bray, Dr Jeremy
Davies, Rt Hon Denzil (L'lli)


Brown, Gordon (D'f'mline E)
Davies, Ronald (Caerphilly)


Brown, Hugh D. (Provan)
Davis, Terry (B'ham, H'ge H'l)


Brown, R. (N'c'tle-u-Tyne N)
Deakins, Eric


Brown, Ron (E'burgh, Leith)
Dewar, Donald






Dixon, Donald
Madden, Max


Dobson, Frank
Marek, Dr John


Dormand, Jack
Mason, Rt Hon Roy


Duffy, A. E. P.
Maxton, John


Eadie, Alex
Maynard, Miss Joan


Eastham, Ken
Meadowcroft, Michael


Evans, loan (Cynon Valley)
Michie, William


Evans, John (St. Helens N)
Mikardo, Ian


Ewing, Harry
Millan, Rt Hon Bruce


Fatchett, Derek
Morris, Rt Hon A. (W'shawe)


Faulds, Andrew
Morris, Rt Hon J. (Aberavon)


Fields, T. (L'pool Broad Gn)
Nellist, David


Fisher, Mark
O'Brien, William


Flannery, Martin
O'Neill, Matin


Foot, Rt Hon Michael
Park, George


Forrester, John
Parry, Robert


Foster, Derek
Patchett, Terry


Fraser, J. (Norwood)
Pavitt, Laurie


Freeson, Rt Hon Reginald
Penhaligon, David


Garrett, W. E.
Pike, Peter


Godman, Dr Norman
Powell, Raymond (Ogmore)


Gould, Bryan
Prescott, John


Gourlay, Harry
Radice, Giles


Hamilton, James (M'well N)
Redmond, M.


Hardy, Peter
Rees, Rt Hon M. (Leeds S)


Harman, Ms Harriet
Richardson, Ms Jo


Harrison, Rt Hon Walter
Roberts, Allan (Bootle)


Healey, Rt Hon Denis
Roberts, Ernest (Hackney N)


Heffer, Eric S.
Robinson, G. (Coventry NW)


Hogg, N. (C'nauld &amp; Kilsyth)
Rogers, Allan


Holland, Stuart (Vauxhall)
Rooker, J. W.


Home Robertson, John
Ross, Ernest (Dundee W)


Howell, Rt Hon D. (S'heath)
Ross, Stephen (Isle of Wight)


Howells, Geraint
Rowlands, [...]ed


Hoyle, Douglas
Ryman, John


Hughes, Mark (Durham)
Sedgemore, Brian


Hughes, Robert (Aberdeen N)
Sheldon, Rt Hon R.


Hughes, Roy (Newport East)
Shore, Rt Hon Peter


Hughes, Sean (Knowsley S)
Short, Ms Clare (Ladywood)


Hughes, Simon (Southwark)
Short, Mrs R.(W'hampt'n NE)


John, Brynmor
Skinner, Dennis


Jones, Barry (Alyn &amp; Deeside)
Smith, C.(lsl'ton S &amp; F'bury)


Kaufman, Rt Hon Gerald
Soley, Clive


Kennedy, Charles
Spearing, Nigel


Kilroy-Silk, Robert
Straw, Jack


Lamond, James
Thompson, J. (Wansbeck)


Leadbitter, Ted
Thorne, Stan (Preston)


Leighton, Ronald
Tinn, James


Lewis, Ron (Carlisle)
Varley, Rt Hon Eric G.


Lewis, Terence (Worsley)
Wainwright, R.


Litherland, Robert
Wardell, Gareth (Gower)


Lloyd, Tony (Stretford)
Welsh, Michael


Lofthouse, Geoffrey
Wigley, Dafydd


Loyden, Edward
Williams, Rt Hon A.


McCartney, Hugh
Winnick, David


McDonald, Dr Oonagh
Woodall, Alec


McGuire, Michael
Young, David (Bolton SE)


McKelvey, William



Mackenzie, Rt Hon Gregor
Tellers for the Noes:


McNamara, Kevin
Dr. Roger Thomas and


McTaggart, Robert
Mr. Frank Haynes.


McWilliam, John

Question accordingly agreed to.

Ministerial and other Salaries

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I beg to move,
That the draft Ministerial and other Salaries Order 1983, which was laid before this House on 21st July, be approved.
I explained on 19 July that the Government would wish to reconsider the matter of Ministers' pay if their proposals for the salaries of hon. Members were not accepted by the House. The details of the Government's new proposals on the salaries of Ministers and other office holders up to the end of 1987 were set out in the written answer that I gave to my hon. Friend the Member for Solihull (Mr. Taylor) on 21 July.
With effect from the date when the order is approved, the increase for all Cabinet Ministers will be 4 per cent., save in the case of the Lord Chancellor where a special arrangement has been made. The increase for all Ministers of State will be 4·7 per cent. Other office holders in both Houses will receive increases of either 4·7 per cent. or 5·4 per cent. The average increase for all Ministers and office holders will be 4·7 per cent.
These proposals take account of the need to sustain differentials, in the light of the opinion which the House expressed on Members' pay. Thereafter, on 1 January each year, beginning in 1984 and continuing to 1 January 1987, all Ministers and office holders in both Houses will receive precisely the same percentage increase in their salaries as proposed for hon. Members under the resolution adopted on 19 July. In contrast, however, no arrangements have been made for setting the pay of Ministers and other office holders from 1 January 1988. A further decision will be needed at an appropriate time. Meanwhile, I commend these proposals to the House.

Mr. John McWilliam: It is not my intention to divide the House tonight. I thank the Leader of the House for his Statement, which I welcome. It would be hypocritical of me not to say that I think that Ministers are entitled to all that the Plowden report said they were entitled to, just as I believe that hon. Members are entitled to that. Notwithstanding that, I welcome the right hon. Gentleman's statement.

Mr. Norman St. John-Stevas: I echo what has been said by the hon. Member for Blaydon (Mr. McWilliam) only perhaps rather more enthusiastically and I congratulate my right hon. Friend the Leader of the House on the expeditious way in which he has noted the will of the House. That is further evidence of what an excellent Leader of the House he is.

Mr. Edward du Cann: I rise only to express to my right hon. Friend the Leader of the House my gratitude to him for his having kept his word. I am sure that I am not alone on the Conservative Benches, or indeed on any Benches in the House, in expressing my appreciation.

Mr. Biffen: Thank you, one and all.

Question put and agreed to.

Members of Parliament (Salaries)

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I beg to move,
That the following provision about salaries of Members of this House be made—;
(1) The salaries of Members of each of the descriptions in column 1 of the following Table—;
(a) in respect of service on and after 13th June 1983 and before 1st January 1984 shall be at the yearly rate specified in relation to that description in column 2 of that Table;

TABLE


1
2
3
4
5
6


Description of Member
Yearly rate of salary from 13th June 1983 to end of 1983
Yearly rate of salary for 1984
Yearly rate of salary for 1985
Yearly rate of salary for 1986
Yearly rate of salary for 1987



£
£
£
£
£


1. Member not within paragraph 2
15,308
16,106
16,904
17,702
18,500


2. Officer of this House or Member receiving a salary under the Ministerial and other Salaries Act 1975 or a pension under section 26 of the Parliamentary and other Pensions Act 1972
9,543
10,626
11,709
12,792
13,875

(2) Subject to paragraph (3), in respect of service on and after 1st January 1988—;
(a) the salaries of Members not falling within sub-paragraph (b) shall be at a yearly rate equal to eighty-nine per cent. of the rate which represents the maximum point from time to time on the main national pay scale of the Civil Service grade of Senior Principal or, is such a scale ceases to exist, on the scale which supersedes it; and
(b) the salaries of Officers of this House and Members receiving a salary under the Ministerial and other Salaries Act 1975 or a pension under section 26 of the Parliamentary and other Pensions Act 1972 shall be at a yearly rate equal to sixty-seven per cent. of the rate which represents the maximum point from time to time on the scale referred to in sub-paragraph (a).
(3) Paragraph (2) shall not authorise the making of any payment out of public funds after the end of the period of three months beginning with the day on which any future Parliament first meets unless within that period the continued operation of that paragraph is approved by a Resolution of this House.

I gave the House an undertaking on 19 July that the Government would bring in a new effective resolution which would reflect the expression of opinion of the House on the matter of Members' salaries. That is what the motion now before the House sets out of do.

The effect of the resolution adopted by the House on 19 July was to increase Members' pay by five equal stages between 13 June 1983 and 1 January 1987, at which point the salary will be £18,500. From 1 January 1988 Members' pay will be set at the level then payable to a civil servant in receipt of £18,500 per annum on 13 June 1983.

In seeking to implement the will of the House we had to take account of the fact that on 13 June 1983 no civil servant will be earning precisely £18,500 per annum. That explains the formulation used in the motion. It links the pay of Members to 89 per cent. of the maximum of the pay scale of the senior principal grade which spans £18,500. That gives the figure of just over £18,500.

(b) in respect of service on and after 1st January 1984 and before 1st January 1985 shall be at the yearly rate specified in relation to that description in column 3 of that Table;
(c) in respect of service on and after 1st January 1985 and before 1st January 1986 shall be at the yearly rate specified in relation to that description in column 4 of that Table;
(d) in respect of service on and after 1st January 1986 and before 1st January 1987 shall be at the yearly rate specified in relation to that description in column 5 of that Table; and
(e) in respect of service on and after 1st January 1987 and before 1st January 1988 shall be at the yearly rate specified in relation to that description in column 6 of that Table.

For Ministers and other office holders the effective resolution will implement the will of the House that in future the parliamentary element in the salaries of Ministers and office holders should move, by five equal stages, until it reaches 75 per cent. of the Back-Bench Members' salary on 1 January 1987.

The parliamentary salaries proposed for Members on the one hand and for ministerial and other office holders on the other are set out in the motion. Thus the Government have kept their promise to bring in a revised effective resolution designed to implement the will of the House as expressed on 19 July, and I commend its acceptance.

Mr. John McWilliam: I again welcome the statement of the Leader of the House. It is no secret that Labour Members, and indeed many others, felt that it would have been advisable to implement the Plowden committee's report. The House made its will known last week, and I commend the Leader of the House for enshrining that will entirely within that resolution and thank him for it.

Sir Hugh Fraser: I congratulate my right hon. Friend the Leader of the House on this Byzantine calculation which fully meets the will of the House.

Question put:—;

The House divided: Ayes 250, Noes 18.

Division No. 43]
[10.28 pm


AYES


Aitken Jonathan
Atkins Robert (South Ribble)


Alexander, Richard
Baker, Nicholas (N Dorset)


Alison, Rt Hon Michael
Baldry, Anthony


Amess, David
Batiste, Spencer


Arnold, Tom
Beith, A. J.


Atkins, Rt Hon Sir H.
Bellingham, Henry






Berry, Sir Anthony
Grylls, Michael


Best, Keith
Gummer, John Selwyn


Biffen, Rt Hon John
Hamilton, Hon A. (Epsom)


Blackburn, John
Hamilton, Neil (Tatton)


Bonsor, Sir Nicholas
Hampson, Dr Keith


Boothroyd, Miss Betty
Hanley, Jeremy


Boscawen, Hon Robert
Hardy, Peter


Bottomley, Peter
Hargreaves, Kenneth


Bowden, Gerald (Dulwich)
Harvey, Robert


Boyson, Dr Rhodes
Havers, Rt Hon Sir Michael


Braine, Sir Bernard
Hawkins, Sir Paul (SW N'folk)


Brandon-Bravo, Martin
Hawksley, Warren


Bright, Graham
Hayhoe, Barney


Brown, M. (Brigg &amp; Cl'thpes)
Hayward, Robert


Brown, R. (N'c'tle-u-Tyne N)
Heddle, John


Bruinvels, Peter
Heseltine, Rt Hon Michael


Bryan, Sir Paul
Hickmet, Richard


Burt, Alistair
Higgins, Rt Hon Terence L.


Butterfill, John
Hirst, Michael


Carlisle, John (N Luton)
Holt, Richard


Carlisle, Kenneth (Lincoln)
Home Robertson, John


Carttiss, Michael
Hooson, Tom


Cartwright, John
Howard, Michael


Chalker, Mrs Lynda
Howarth, Gerald (Cannock)


Channon, Rt Hon Paul
Howell, Ralph (N Norfolk)


Chapman, Sydney
Howells, Geraint


Clark, Hon A. (Plym'th S'n)
Hubbard-Miles, Peter


Clark, Dr David (S Shields)
Hughes, Mark (Durham)


Clark, Dr Michael (Rochford)
Hughes, S mon (Southwark)


Clarke Kenneth (Rushcliffe)
Hunt, David (Wirral)


Clegg, Sir Walter
Hunt, John (Ravensbourne)


Colvin, Michael
Hunter, Andrew


Concannon, Rt Hon J, D.
Jackson, Robert


Conlan, Bernard
Jenkin, Rt Hon Patrick


Conway, Derek
Jessel, Toby


Coombs, Simon
John, Brynmor


Cope, John
Jones, Gwilym (Cardiff N)


Couchman, James
Jones, Robert (W Herts)


Crouch, David
Kellett-Bowman, Mrs Elaine


Currie, Mrs Edwina
Key, Robert


Dicks, T.
King, Roger (B'ham N'field)


Dorrell, Stephen
King, Rt Hon Tom


Douglas-Hamilton, Lord J.
Knight, Gregory (Derby N)


Dover, Denshore
Knowles, Michael


du Cann, Rt Hon Edward
Knox, David


Duffy, A. E. P.
Lamond, James


Dunn, Robert
Lang, Ian


Durant, Tony
Latham, Michael


Dykes, Hugh
Lawler, Geoffrey


Edwards, Rt Hon N. (P'broke)
Lawrence, Ivan


Eggar, Tim
Lawson, Rt Hon Nigel


Evennett, David
Leadbitter, Ted


Eyre, Reginald
Lee, John (Pendle)


Favell, Anthony
Leigh, Edward (Gainsbor'gh)


Forrester, John
Lennox-Boyd, Hon Mark


Forth, Eric
Lester, Jim


Franks, Cecil
Lewis, Sir Kenneth (Stamf'd)


Fraser, Rt Hon Sir Hugh
Lewis, Ron (Carlisle)


Fraser, Peter (Angus East)
Lightbown, David


Fry, Peter
Lloyd, Peter, (Fareham)


Gale, Roger
Lord, Michael


Galley, Roy
Lyell, Nicholas


Garel-Jones, Tristan
McCrindle, Robert


Goodlad, Alastair
McCurley, Mrs Anna


Gourlay, Harry
McDonald, Dr Oonagh


Gow, Ian
Macfarlane, Neil


Gower, Sir Raymond
McGuire, Michael


Grant, Sir Anthony
MacKay, Andrew (Berkshire)


Green way, Harry
MacKay, John (Argyll &amp; Bute)


Gregory, Conal
McNair-Wilson, P. (New F'st)


Griffiths, Peter (Portsm'th N)
McNamara, Kevin


Ground, Patrick
McQuarrie, Albert





McWilliam, John
Ridley, Rt Hon Nicholas


Major, John
Ridsdale, Sir Julian


Malins, Humfrey
Robinson, Mark (N'port W)


Malone, Gerald
Roe, Mrs Marion


Maples, John
Rogers, Allan


Marland, Paul
Ross, Stephen (Isle of Wight)


Marlow, Antony
Rossi, Sir Hugh


Mates, Michael
Rowe, Andrew


Mather, Carol
Ryder, Richard


Mayhew, Sir Patrick
Sackville, Hon Thomas


Merchant, Piers
St. John-Stevas, Rt Hon N.


Meyer, Sir Anthony
Sayeed, Jonathan


Millan, Rt Hon Bruce
Shaw, Giles (Pudsey)


Miller, Hal (B'grove)
Shaw, Sir Michael (Scarb')


Mills, Iain (Meriden)
Shelton, William (Streatham)


Mills, Sir Peter (West Devon)
Sims, Roger


Mitchell, David (NW Hants)
Smith, Tim (Beaconsfield)


Moate, Roger
Soames, Hon Nicholas


Morris, Rt Hon J. (Aberavon)
Spence, John


Morris, M. (N'hampton, S)
Spencer, D.


Morrison, Hon C. (Devizes)
Spicer, Michael (S Worcs)


Moynihan, Hon C.
Stern, Michael


Mudd, David
Stevens, Lewis (Nuneaton)


Needham, Richard
Stewart, Allan (Eastwood)


Neubert, Michael
Stokes, John


Newton, Tony
Stradling Thomas, J


Nicholls, Patrick
Straw, Jack


Normanton, Tom
Tebbit, Rt Hon Norman


Norris, Steven
Terlezki, Stefan


Osborn, Sir John
Thatcher, Rt Hon Mrs M.


Ottaway, Richard
Thompson, Donald (Calder V)


Page, John (Harrow W)
Thompson, Patrick (N'ich N)


Page, Richard (Herts SW)
Townend, John (Bridlington)


Parris, Matthew
Tracey, Richard


Patchett, Terry
Trippier, David


Patten, John (Oxford)
Waddington, David


Pavitt, Laurie
Wakeham, Rt Hon John


Pawsey, James
Waldegrave, Hon William


Peacock, Mrs Elizabeth
Wardle, C. (Bexhill)


Penhaligon, David
Wigley, Dafydd


Percival, Rt Hon Sir Ian
Winterton, Mrs Ann


Pink, R. Bonner
Winterton, Nicholas


Powley, John
Wolfson, Mark


Prentice, Rt Hon Reg
Wood, Timothy


Price, Sir David
Younger, Rt Hon George


Radice, Giles



Raffan, Keith
Tellers for the Ayes:


Redmond, M.
Mr. Douglas Hogg and


Rhys Williams, Sir Brandon
Mr. Tim Sainsbury.


NOES


Alton, David
Madden, Max


Ashdown, Paddy
Michie, William


Barron, Kevin
Nellist, David


Beaumont-Dark, Anthony
Patchett, Terry


Bermingham, Gerald
Powell, Raymond (Ogmore)


Boyes, Roland
Rogers, Allan


Cohen, Harry
Skinner, Dennis


Corbyn, Jeremy



Fallon, Michael
Tellers for the Noes:


Fields, T. (L 'pool Broad Gn)
Mr. Tony Banks and


Kilfedder, James A.
Mr. Bob Clay.

Question accordingly agreed to.

Mr. Speaker: Before I call upon the Leader of the House to move motion 8, I inform the House that I have selected the amendment of the right hon. Member for Worthing (Mr. Higgins).


Car Mileage Allowance


10.40 pm


Mr. Biffen: I beg to move,


That, in the opinion of this House, the rate of car mileage allowance payable to Members travelling on Parliamentary duties (and accordingly the rate applicable to the car mileage allowances payable in respect of journeys by the spouse of a Member and journeys by the persons in respect of whom the secretarial and research allowance of a Member is payable) should, for journeys commenced on or after 1st October 1983, continue to be 25·8p per mile, notwithstanding any change with effect from that date in the relevant Civil Service rate of car mileage allowance.


In this Resolution "the secretarial and research allowance" has the same meaning as in the Resolution of this House of 19th July 1983 (Office, Secretarial and Research etc. Allowances).


The purpose of the motion is to maintain the present flat rate system of the motor mileage allowance at the current rate of 25·8p a mile. The allowance is regulated by a resolution of the House that was agreed on 22 July 1975. It provides that the rate payable should be the same as the Civil Service rate for journeys made on official business. From 1 October a two-tier structure is to be introduced for the Civil Service mileage allowance, and the effect of the resolution of 22 July 1975 would be to apply the new arrangements automatically to Members. The motion will ensure that the status quo is maintained. It has been moved in response to the strong view that was expressed on 19 July. It was then argued that there should be further consideration of the Civil Service two-tier rate as an appropriate reflection of motoring costs incurred by Members.
The effect of the amendment of my right hon. Friend the Member for Worthing (Mr. Higgins) is to link the motor mileage allowance paid to hon. Members with the higher level of the two-tier rate that is now proposed for the Civil Service. It thus embodies the concept of automaticity while reflecting a concern that the Civil Service rate may rise as a result of cost increases before the House has an opportunity to consider further what the most appropriate future arrangements for Members should be.
It may help the House to know that I can accept my right hon. Friend's amendment on this basis. The Government are content that the motion, as amended, if the House approves it, should continue until such time as the House may decide on alternative arrangements in the light of the further consideration of the subject which is proposed. Meanwhile, I shall consult through the usual channels with a view to having the subject examined after the summer recess in a way that will enable Members to give evidence of their motoring costs. I stress that no change in the existing arrangements that are made secure by the motion can come about without the authority of the House.

Mr. Terence Higgins: I beg to move, in line 6, to leave out from "mile" to the end of line 7 and insert
and should reflect thereafter any change in the Civil Service rate of car mileage allowance presently set at this level.".
I was taught by the late lain Macleod that if an amendment in one's name was accepted by the Government it was good manners and sound politics not to make the two-hour speech in support of the amendment that one might otherwise have made.
It is not my intention in the amendment to endorse the suggestion that the mileage allowance should be a two-tier arrangement. The arrangement which has stood us in good stead over many years is one which is much to be preferred. I was worried that my right hon. Friend's amendment would freeze the 25·8p rate at that level for, as far as one could see, all time. It is important that motoring costs incurred by hon. Members going about their legitimate business in the service of their constituents should be covered. Without my amendment, if costs go up there will not be any increase in the car mileage allowance.
The second point of my amendment is that to which my right hon. Friend referred to rather inelegantly as "automaticity". I cannot improve the description. If there are changes in costs, it is right that the changes in allowance be made automatically rather than the Leader of the House having to put down an order to increase the allowance perhaps two or three times a year. I hope that the House will bear in mind the wording of my amendment which I understand to have the effect that I have described. I am grateful to my right hon. Friend for proposing, to accept it.

Mr. Jack Dormand: Perhaps I might speak as a simple layman on behalf of my hon. Friends about what the Leader of the House is accepting. My understanding, from informal discussions today, is that the linkage of the car mileage allowance applies only to the period in which the Leader of the House is considering a new scale or structure. If that is so—;I am happy to be contradicted—;following the results of the inquiry with which the Leader of the House dealt so flexibly in the main debate, there might be a new structure that might include a two-tier system. I and at least some of my hon. Friends want to be absolutely clear about that.

Mr. Biffen: It is perfectly true that the motion as amended provides for payment of the present mileage rate of 25·8p or any subsequent alteration to the higher Civil Service rate. When discussions and considerations of an appropriate rate for the House have been concluded, the matter must be resolved by the House. There can be no question of a two-tier rate as the present arrangements will apply until the House authorises a replacement.

Mr. Dormand: Can the Leader of the House say what the Government's view will be then?

Mr. Biffen: No. We shall hold the discussions through the usual channels with an open mind.

Mr. John McWilliam: It was the clear will of the House last week that, whatever happened to mileage allowances, there must be a single-tier system. I congratulate the Leader of the House on enshrining the will of the House in the original motion. I also congratulate the right hon. Member for Worthing (Mr. Higgins) on his amendment, which takes account of what might happen. I also support my hon. Friend the Member for Easington (Mr. Dormand), in that the Leader of the House must come back to the House if there is any intention to change the system. No hon. Member is arguing about the rate. We look forward to him doing so. I think that he has given us that commitment.

Amendment agreed to.

Main Question, as amended, agreed to.

Resolved,
That, in the opinion of this House, the rate of car mileage allowance payable to Members travelling on Parliamentary duties (and accordingly the rate applicable to the car mileage allowances payable in respect of journeys by the spouse of a Member and journeys by the persons in respect of whom the secretarial and research allowance of a Member is payable) should, for journeys commenced on or after 1st October 1983, continue to be 25·8p per mile, and should reflect thereafter any change in the Civil Service rate of cat mileage allowance presently set at this level.
In this Resolution "the secretarial and research allowance" has the same meaning as in the Resolution of this House of 19th July 1983 (Office, Secretarial and Research etc. Allowances).

Statutory Instruments

Mr. Speaker: With the leave of the House, shall put motions 9 to 14 together.

Motion made, and Question put forwith, pursuant to Standing Order No. 79 (5) (Standing Committees on Statutory Instruments &amp;c.).

AGRICULTURE

That the Agriculture and Horticulture Grant (Variation) (No. 2) Scheme 1983 (S.I., 1983, No. 923), a copy of which was laid before this House on 30th June, be approved.
That the draft Agricultural and Horticultural Co-operation (Variation) Scheme 1983, which was laid before this House on 30th June, be approved.—;[Mr. Neubert.]

ROAD TRAFFIC

That the draft International Carriage of Perishable Foodstuffs Act 1976 (Amendment) Order 1983, which was laid before this House on 5th July, be approved.—;[Mr. Neubert.]

AGRICULTURE

That the draft Sheep and Goats (Removal to Northern Ireland) Regulations 1983, which were laid before this House cn 13th May, in the last Session of Parliament, be approved.—[Mr. Neubert.]

INDUSTRIAL ORGANISATION AND DEVELOPMENT

That the draft Iron Casting Industry (Scientific Research Levy) (Amendment) Order 1983, which was laid before this House on 22nd June, be approved.—;[Mr. Neubert.]

TERMS AND CONDITIONS OF EMPLOYMENT

That the draft Job Release Act 1977 (Continuation) Order 1983, which was laid before this House on 12th May, in the last Session of Parliament, be approved.—;[Mr. Neubert.]

Question agreed to.

Fishburn Coke Works, Sedgefield

Motion made, and Question proposed, That this House do now adjourn.—;[Mr. Neubert.]

Mr. Tony Blair: Fishburn coke works is in County Durham and is owned by National Smokeless Fuels, which is a wholly owned subsidiary of the National Coal Board. It is acknowledged on all sides to be a highly efficient and modern plant, producing some of the best domestic coke in the United Kingdom or, indeed, anywhere in the world. It has a remarkable industrial relations record. Its existence is pivotal for the community of Fishburn, yet National Smokeless Fuels tells us that it must be closed. I come, as it were, post haste from a meeting in the constituency about the Fishburn coke works. Although the mood is serious, sober and angry, it is not defeatist.
It is right that Fishburn should be debated in the House, because it is a symbol of what the north-east faces: not an economic recession, but an economic blitz. County Durham is a county under siege. Since July 1979, 25,000 redundancies have been declared. In the northern region as a whole, there are now 50 people chasing each vacancy. Moreover, 34 per cent. of all public investment in the north goes on paying unemployment benefit. The cost to the Exchequer, at the rate of some £5,000 per person unemployed, is over £1 billion per year.
Young people are particularly are risk. Fewer than 20 per cent. of those who come off youth opportunity schemes find permanent employment. While closures and redundancies take place on that scale, the need for sustained, and indeed increased, investment in the northeast continues, yet the level of investment has been drastically cut. Between 1976 and 1982 unemployment has doubled, yet public investment has fallen from about £380 million to £246 million. There has been a relative decline in private investment, too. In 1976 almost 15 per cent. of manufacturing investment came to the north, but now the figure is close to 10 per cent.
That is the broad canvass of decline and despair of which Fishburn is a part. Its prominence, and the reason why the north-east watches with such apprehension to see what will happen to it, is not hard to explain. Fishburn is part of a special employment black spot called the Wingate employment exchange area. In that area, the rate of male unemployment was 48·9 per cent. in February 1983. If Fishburn closes, it will rise to 57 per cent. The total rate of unemployment at present is 40·9 per cent., but if Fishburn closes it will rise to 45 per cent.
Last year, out of 100 school leavers from Sedgefield comprehensive, the major school just up the road from Fishburn, seven got jobs—;three on their fathers' farms. Fishburn coke works provides some 83 per cent. of male employment, or 61 per cent. of total employment for Fishburn. Of the work force, 28 per cent. is under the age of 30. Although many young people have migrated from County Durham and the Wingate employment exchange area, Fishburn coke works at least provides some sort of work and stability for young people. If it closes, 270 jobs will go directly. However, there are also indirect consequences for employment. Fishburn coke works imports about 290,000 tonnes of coal from the pits of Durham and Yorkshire. Road hauliers transport the coke from Fishburn to the retailers. Some coke is exported to

Germany and to Scandinavia from Seaham harbour, which provides work for dockers. Against that background, the social reasons for not closing the coke works are compelling and could stand alone.
However, in this case they do not stand alone. The case put forward by National Smokeless Fuels rests on what it says is a fall in demand for the domestic coke made at Fishburn. It might be pertinent to ask, and it is curious, why after so many years of falling demand the company should decide now that it is unbearable. There is considerable apprehension among the coke workers and the people who live in the area that National Smokeless Fuels is being made fit for privatisation. No one has suggested that Fishburn is not highly efficient and productive, yet while Fishburn is run with only 50 per cent. throughput at present, private coke works, such as Randolph, cannot meet the demand for domestic coke. It is extraordinary.
At national level, domestic coke production has increased extraordinarily during the past year. In 1981–82, 65,000 tonnes of domestic coke were produced, and in 1982–83, 102,000 tonnes were produced. Yet during the past year there has been a reduction of almost the same amount in the coke produced by National Smokeless Fuels. I make no accusations of bad faith at present, But I pass on the apprehension of my constituents and the grounds for their apprehension.
Leaving that aside, let us consider the losses made by the coke works. In 1981–82 it lost £3·8 million, in 1982–83 the figure was cut to £2·7 million, and the prediction for 1983–84 is that it will be steady. We are told that the recession is ending, so one would expect the demand for Fishburn coke to increase. While the Fishburn coke works faces closure, and while we are told that there is a reduction in demand for domestic coke, at present about 5,000 tonnes of coke is imported each day into Britain to feed the Teesside-Redcar steel works. That is Japanese coke made from Australian coal. The placing of that order by the British Steel Corporation with Japan has had a major impact on the fortunes of National Smokeless Fuels, and indirectly on Fishburn.
The works at Teesside-Redcar requires blast furnace industrial coke. Fishburn could convert to supply industrial coke, at the best estimate within 36 hours, and certainly in a matter of days. The blend of blast furnace coke required by that steel works could be supplied by other blast furnace cokes in National Smokeless Fuels. There would then be a shortfall in the supply of ordinary blast furnace coke, and Fishburn could be converted to meet the shortfall. There is no question but that the decision by BSC to place the order with Japan has had a considerable impact on Fishburn.
The economic picture could be much improved were the British Steel Corporation to show a little national spirit and co-operation. However, accepting those losses of £2·7 million, how would a sensible and financially prudent Government view such a matter? The relevant question is, what would be the cost to the public purse if Fishburn were to close? Durham county council and Sedgefield district council have calculated the direct costs of closure as follows. In the first 12 months, almost £3 million would be lost to the Exchequer. Redundancy payments total some £1,237,000, about £940,000 would be lost through the payment of unemployment benefits and the loss of national insurance contributions, and there would be £424,000 of


lost tax. If one adds the lost rates and other costs, the total is nearly £3 million. The continuing loss in each year after the year of closure is about £1,500,000 a year.
The cost of creating 272 jobs, if one takes a figure of about £10.000 a job—;that is what is thought to be necessary to create a job in Durham—;is also about £3 million. In presenting those figures, one leaves out the cost of writing off buildings and plant and machinery, and the knock-on effect on other jobs, such as the effect on local traders and on the waste gas supplies that are used to supply a nearby quarry and Winterton hospital, which will have to be supplied from elsewhere. A prudent Government, balancing their sums would see the economic case to be against closure. There is a further reason for not closing the works.
In 1980, when the Fishburn coke workers were told that the economic position of National Smokeless Fuels was deteriorating, they were asked to co-operate with the management and to do everything that they could to ensure that Fishburn was economically viable. They complied in a way that is a remarkable tribute to cooperation between unions and management. They did everything that the Government say trade unions should do. Where savings could be made they were made, where they could cut costs they cut costs; they co-operated in every conceivable way, and I challenge anybody to deny that.
The savings were made on the initiative of the workers. Their idea was to set up a performance review committee. About £300,000 of continuing savings were made each year, absenteeism and sickness were cut by about 3 per cent., and it is about the tidiest plant that one could see. They even, no doubt for the purposes of his education, invited the local manager to their local lodge National Union of Mineworkers meetings. They have done all that the Government have asked trade unionists to do.
Is the lesson that the Government wish the Fishburn coke workers to learn that, if one co-operates, one becomes reviled, that co-operation is trampled underfoot, and that all the efforts to help are swept disdainfully aside? If so, the lessons that the people of Fishburn will learn, and the lesson that the people in the north-east will learn, is that the only way to get on is to turn to other and less cooperative ways of fighting for jobs.
The mood of the meeting that I attended in Fishburn was one of defiance. The workers are not defeated and they do not intend to be. They know that what is at stake in Fishburn is not just jobs—;and not just their own jobs, but the jobs of their children and of their children's children. They know that what is at stake at Fishburn is the survival of a community. They are not prepared, and neither am I, to see that community go tinder. It is a living community with a living plant meeting a need. We should not kill Fishburn, but save it.

Mr. Mark Hughes: Having had the honour to represent Fishburn from 1973 until 9 June, I support every word spoken by my hon. Friend the Member for Sedgefield (Mr. Blair). This is.a marvellous community and a superb coke works, and these are people who have done everything asked of them. We have closed another pit in the Durham constituency in the past four weeks, and the threat of the closure of Fishburn is an inhuman insult to the people of south-east Durham.

The Under-Secretary of State for Energy (Mr. Giles Shaw): I congratulate the hon. Member for Sedgefield (Mr. Blair) on the way in which he argued his case. His constituents will recognise not just the promptness with which he acted but the skill with which he handled the matter. I accept fully not just his views but his right to express them on behalf of the community that he represents.
The hon. Member for City of Durham (Mr. Hughes), who is well used to these matters, will recognise how cogently the hon. Member for Sedgefield, who is new to our affairs, put the case for his constituents at Fishburn. As the hon. Member for City of Durham said in his endorsement of the speech of the hon. Member for Sedgefield, he has known about these problems for a long time. The hon. Member for the City of Durham is aware of the long-term problems that the coal industry faces. The Fishburn works are a significant but none the less relatively small part of that industry.
Tomorrow, the National Coal Board publishes its annual report and accounts for the financial year 1982–83. That report will expose fully the factors that have led to the decision by National Smokeless Fuels to propose the closure of the works at Fishburn.
Despite the large amounts of money that have been invested in the coal industry over the last decade, the board's financial position has continued to deteriorate markedly. In 1982–83 the board has shown a loss of £111 million after Government grants of £520 million.
There is every sign that before deficit grant alone, the board's losses will be about £600 million in 1983–84.
Why is the board's financial position worsening? Increased capital investment has led to increased productivity. I endorse fully the remarks made by the hon. Member for Sedgefield about the remarkable co-operation over a long period of the workers at Fishburn. Investment in the industry has been high throughout. As the hon. Member for City of Durham will be aware, it is in excess of the 1974 "Plan for Coal" level which predicted about £1·4 billion. About £4 billion has been invested already, two thirds of it under this Government and their immediate predecessor.

Mr. Roland Boyes: Will the Minister tell the House what the level per tonne subsidy is in other EC countries compared with that in Great Britain?

Mr. Shaw: The hon. Gentleman will find the answer to that in a written answer given within the past two weeks. If one is comparing, in absolute costs, what the Government have done in support of the industry here, one must include the amounts of investment as well as those additional aids which are given in coal support. There can be little doubt that the total amount that the Government and the United Kingdom have invested in support of their coal industry exceeds any other within the Community.
The National Coal Board produces far more coal than it can sell. I believe that must be agreed on both sides of the House. The board produced slightly more coal last year than it did in the previous year but consumption was down by over 6·5 million tonnes. Thus, yet more coal has had to be put to stock, which means that the coal board's associated interest and other charges have increased. National Smokeless Fuels whose Fishburn plant we are discussing is in much the same position.
National Smokeless Fuels Limited is a wholly owned subsidiary of the National Coal Board. It produces coke for the foundry, domestic and blast furnace markets as well as manufacturing domestic smokeless fuels and a wide range of other products derived from coal. National Smokeless Fuels has been hard hit, not only by the worldwide slump in the demand for steel—;the hon. Member for Sedgefield referred to the problems with BSC—;and consequently the reduced need for blast furnace coke, but by the fall in demand for iron castings which has led to a fall in demand for foundry coke by almost 50 per cent. in the past five years. The domestic coke market has declined by a third over the same period.
Markets for coke have declined, but there has been no corresponding fall in production capacity. Coke making is a continuous process. The hon. Members for Sedgefield and City of Durham know much more about that process than I do. Throughput can be reduced, but the fall in demand has inevitably led to high unit costs. NSF, with the co-operation of the workforce, has done what it can to improve efficiency and to find new markets, but coke exports in the past two years have come mainly from stock. That has helped to improve the company's cash flow position, but not its profitability.
The Government have continued to give stocking aid to coke amountingto £8 million last year. We have also extended the period during which the foundry coke subsidy will be paid until the end of this calendar year. As the hon. Member for City of Durham will recall, that subsidy was introduced as a temporary measure in July 1981 to help the United Kingdom foundry industry, rather than the coke industry, to improve its competitive position in relation to its European counterparts. United Kingdom foundry coke prices are now comparable with the general run of prices in Europe, but neither of those forms of Government support has disguished the fact that NSF has been incurring losses in the past few years. It incurred a loss of £8 million in 1981–82, and the loss in 1982–83 is likely to be about £13 million.
NSF has two works in county Durham—;Fishburn and Hawthorn—;both of which produce Sunbrite, which is a domestic smokeless fuel. The works are less than 10 miles apart and both are working at only 50 per cent. capacity. Running costs could be cut by concentrating production at one plant, thus gaining all the advantages of lower unit costs. Fishburn and Hawthorn lost approximately £2·5 million each last year—;£5 million in total. If throughput were concentrated in one works, the loss would be reduced to between £500,000 and £1 million per year. As the hon. Member for Sedgefield will recognise, this would lead to a saving of £4 million per year compared with the initial cost of closure of £3 million in the first year.
As I have already said, I am all too well aware of the high quality of the work force at Fishburn. As the hon. Member for Sedgefield said, it is efficient and co-operative and has done everything asked of it by its employers in the recent past. I think that the hon. Gentleman would agree that that is true of the work force within NSF generally. It is extremely effective and co-operative.
Nevertheless, when there are no customers for a product, painful decisions ar inevitable. The Fishbum works can also produce blast furnace coke and it has been

suggested that it could produce coke for Redcar steelworks, which now imports coke from Japan. Although Fishburn could technically produce that coke from imported coal, the fall in demand for steel coking is such that NSF is perfectly able to meet it from the other works.
As the hon. Member for City of Durham will know, the Hawthorn works was built four years later than the Fishburn works. Its ovens, being that much younger, are therefore in better condition. I understand that the byproducts plant at Hawthorn is also in better condition and that space is available to extend the plant should the need arise. That is not the case at Fishburn.
Hawthorn receives 60 per cent. of its coal by conveyor from an adjoining pit. The cost of transporting the raw material to the coke works is thus correspondingly lower than at Fishburn, where delivery is by both road and rail. The introduction of British Rail's new Speedlink freight system would require major investments and extensive changes at Fishburn to enable that works to handle the new types of wagon, whereas Hawthorn already has adequate road and rail facilities.
Higher throughput at Hawthorn and the resulting lower running costs are the kind of measures that must be taken if NSF is to meet its objective of returning to viability. Only when NSF's running costs are in line with those of its competitors will it be able to price its product at competitive levels and thus ensure continued employment for its work force.
The output from Hawthorn after the proposed closure would be similar to the current output from both works. There would be little change in the amount of coal used and claims that the closure of Fishburn works would lead to pit closures are not true.
As has been mentioned, NSF has customers for the surplus gas from Fishburn. The company is well aware of the implications for its customers should the closure go ahead, but any further consideration of the detail of these is a matter for commercial negotiation between the board and its customers. Special arrangements will, however, be made to ensure that supplies to Winterton hospital are secure.
I am well aware that the hon. Members for Sedgefield and City of Durham, and other hon. Members present today, are concerned about the effects that the proposal would have on employment in the area and in the county of Durham in general. Claims have been made about the scale of unemployment that would result. Fishburn is within 25 miles of all National Smokeless Fuels' other northern works. There are also a number of collieries in the area. Some men will be required at Fishburn on demolition and salvage works if the closure proceeds. National Smokeless Fuels intends to offer jobs to all Fishburn employees who wish to continue working in the industry, either at other NSF works or, through the good offices of the NCB, at collieries in the area. Those who do not wish to continue will, by virtue of years of service, be offered redundancy terms under the redundant miners payments scheme which, as hon. Members who study coal matters will know, are among the most generous in any industry. It is, therefore, wrong to claim that all the workers at Fishburn would become unemployed, or to base calculations as to long-term costs on that assumption.
In conclusion, I must stress two points. First the proposal to close Fishbum coke works is a matter for the


management of National Smokeless Fuels and is still under discussion between it and the unions, using the agreed review procedures.
Secondly, in this instance and in the totality of the problems facing the National Coal Boa-d and the coal and coking industries, realistic calculations must be based on the state of the market and the forecast development of coal as the prime source of energy. It is inevitable that there will be reappraisal of past investments, and it is right that there should be new investment for more efficient

production. If the market has shown that it is no longer capable of supporting the products from plants, however, rationalisation is inevitable, whatever the strength of the case for individual plants. No better case could be made than that made by the hon. Member for Sedgefield today, but the problems with which the NCB and National Smokeless Fuels have to deal are very great indeed.
Question put and agreed to.
Adjourned accordingly at seventeen minutes past Eleven o'clock.